Warner Bros. Discovery Sues NBA Over Amazon Streaming Rights

The media company is seeking to block the NBA from granting rights to Amazon, which Warner Bros. Discovery has tried to acquire similar rights for, or seeking financial compensation.

The NBA announced Wednesday that it has reached agreements with Disney, Comcast Corp.’s NBCUniversal and Amazon.com Inc. for three different gaming packages, ending its nearly 40-year relationship with Turner Sports, a Warner Bros. Discovery subsidiary. The 11-year media rights deal is worth an estimated $77 billion — a massive increase over the previous agreement as the value of live sports events booms.

In response to the lawsuit, NBA spokesman Mike Bass said, “Warner Bros. Discovery’s allegations are without merit and will be addressed by our attorneys.”

Warner Bros. Discovery said earlier this week it had filed paperwork with the league to match one of the packages, which people familiar with the matter identified as a $1.8 billion-a-year gaming package earmarked for Amazon. The tech giant’s deal includes regular-season games, an in-season tournament and some playoff games. The NBA granted Warner Bros. Discovery the rights to the match when it signed its previous media deal. Deal in 2014This ruling aims to give the existing company the right of last refusal to maintain its status as a media partner.

But Warner Bros. Discovery’s decision to match Amazon’s package, rather than NBCUniversal’s $2.5 billion-a-year deal, prompted the league to declare Wednesday that the match rights were invalid. Warner Bros. Discovery’s offer for the package includes airing NBA games on its cable network TNT and streaming them on its streaming service Max. The league argued that this was not a comparison to Amazon Prime Video, which is a streaming-only service.

Warner Bros. Discovery said in a court filing Friday that its matching rights should apply to the Amazon bundle because many of the games in that bundle had previously aired on cable television.

The MRE also states that,[i]“If TBS matches a third-party offer that includes cable rights and there are no other matches in place, TBS will have the exclusive right and obligation to exercise the cable rights set forth in (and on the same terms as) the third-party offer,” Warner Bros. Discovery wrote in its filing. “That’s exactly what happened here: Amazon made an offer for the cable rights as defined in the MRE, and TBS matched it. But in violation of the agreement, the NBA refused to honor TBS’s offer.”

In a letter sent to Warner Bros. Discovery on Wednesday, the NBA cited contractual language for the 2014 match rights as the reason for rejecting the offer.

The NBA cited the following provision: “If a bidder matches a third-party offer to exercise the Game Rights through any specified form of audio and video co-distribution, such bidder shall have the right and obligation to exercise such Game Rights only through the specified form of audio and video co-distribution (e.g., if the specified form of audio and video co-distribution is distribution via the Internet, such bidder may not exercise such Game Rights via television distribution).”

Warner Bros. Discovery has filed a lawsuit against the NBA, CNBC’s David Faber reported Thursday.

In 2022, the CEO of Warner Bros. Discovery said his company “didn’t have to own the NBA” if the economy wasn’t healthy.

“As far as sports are concerned, we are tenants,” Zaslav said at a sports event. Investor Conference November 2022“This is not good business.”

Friday’s lawsuit, however, detailed the value of the NBA to Turner Sports. Owning the NBA rights is valuable to the health of Warner Bros. Discovery’s cable TV business, which has suffered in recent years as millions of Americans have ditched traditional pay TV in favor of a host of streaming services.

“NBA games drive increased viewership and ratings as consumers become more inclined to watch games live and in real time. This in turn impacts the price that TBS and WBD can charge advertisers and distributors who license TNT to broadcast to their customers,” the company wrote in the complaint. “Thus, NBA distribution rights give TBS and WBD the ability to grow their brands and reach a broader pool of consumers than only NBA games. NBA television rights also give TBS and WBD a competitive advantage over other programs, particularly when negotiating with other leagues for sports rights.”

Warner Bros. Discovery alleged that the NBA brings “intangible and immeasurable benefits” to the company’s business and sought “preliminary and permanent relief to prevent the NBA from licensing these unique and irreplaceable rights.” [to Amazon]She added that if “equitable relief is not granted,” she expects “monetary damages” from the NBA.

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