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The Warner Bros. Discovery–NBA battle has now formally reached the legal arena.
As increasingly expected, the TNT Sports parent company responded Friday, contesting the NBA’s rejection this week of its media-rights matching offer and subsequent deal with Amazon. The WBD lawsuit was filed under seal in the Supreme Court for the state of New York by the company’s attorneys from Weil, Gotshal & Manges LLP.
In a redacted complaint, WBD alleges the NBA breached their contract on three different fronts, and it is seeking both preliminary and permanent injunctions against the league to “enjoin the NBA … from granting [TNT Sports’] rights to Amazon or any other party.” The network also seeks a court declaration that it matched Amazon’s offer and is entitled to obtain those rights, as well as legal costs and “other relief as this court may deem just and proper.” WBD additionally is seeking unspecified monetary damages “if and to the extent that injunctive and equitable relief is not granted.”
In the complaint, WBD further accuses the league of “carefully and meticulously crafting the Amazon offer to circumvent [TNT Sports’] offer, including by agreeing to include provisions in the Amazon offer that the NBA believed [TNT Sports] and WBD could not and would not perform.”
The legal action by WBD arrives as the company faces increasing investor backlash, a sagging stock, and downgraded ratings from analysts due to the loss of NBA rights. As the network tries to retain its ties with a league clearly seeking to take its games elsewhere, the situation now is poised to become one of the most combative rights disputes in modern sports-media history.
“Given the NBA’s unjustified rejection of our matching of a third-party offer, we have taken legal action to enforce our rights,” TNT Sports said in a statement. “We strongly believe this is not just our contractual right but also in the best interest of fans who want to keep watching our industry-leading NBA content.”
Along similar lines, WBD added in the complaint that it “will suffer irreparable harm unless the NBA is ordered to specifically perform its obligations. Among other things, [TNT Sports] will lose the unique and valuable rights that the [matching rights] was designed to protect, the ‘halo’ benefits associated with telecasting such highly rated and successful content, its competitive advances with sports leagues and distributors, market share in the sports licensing market, immeasurable goodwill, and the substantial sums it has invested in building its NBA brand.”
The NBA responded to the suit Friday afternoon with a concise statement: “Warner Bros. Discovery’s claims are without merit and our lawyers will address them.”
Match or No Match
WBD is trying to match Amazon’s “C” package with the NBA, estimated at $1.8 billion per year, arguing it indeed has met those terms and that it “did not believe the NBA can reject” the latest TNT Sports offer. The NBA, however, contends that WBD’s matching rights do not apply to an all-streaming package such as what Amazon has acquired.
WBD seeks to counter that argument in the complaint, saying in part, “had [TNT Sports] and the NBA intended to distinguish between the way content was transmitted … as opposed to the way in which distributed content was viewed by the end consumer, they would have distinguished between ‘cable television,’ ‘internet television,’ and ‘satellite television.’ But they did not because that was not what was intended.”
As the league announced Wednesday a set of 11-year, $77 billion rights deals with not only Amazon but Disney and NBC Sports, it said that “Warner Bros. Discovery’s most recent proposal did not match the terms of Amazon Prime Video’s offer,” adding that “all three partners have also committed substantial resources to promote the league and enhance the fan experience.”
