Warner Bros Discovery Files Lawsuit Against NBA Over Broadcast Rights Bid

By Dawn Chmielewski

Warner Bros Discovery and its sports division, Turner Broadcasting System, initiated legal action against the National Basketball Association in New York on Friday, following the league’s denial of its matching bid for media rights.

The media company contends that the NBA’s refusal to uphold its obligation to match third-party offers breaches its agreement with Turner. In a statement, TNT Sports asserted, "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."

An NBA spokesperson, Mike Bass, responded by declaring Warner Bros Discovery’s claims as "without merit."

Earlier this week, the NBA announced that it had granted media rights to ESPN, NBCUniversal, and Amazon for a new 11-year deal worth $77 billion. The NBA dismissed a last-minute proposal from TNT Sports, stating it was insufficient compared to Amazon’s offer, thereby ending a nearly 40-year partnership after next season.

Turner claims it has a significant stake in retaining NBA game rights, having invested billions for distribution rights and additional hundreds of millions for production and talent, including its acclaimed "Inside the NBA" show featuring renowned personalities such as Ernie Johnson, Charles Barkley, Shaquille O’Neal, and Kenny Smith.

The company argues that NBA games are "unique assets" that significantly drive viewership and ratings. This impact, they claim, affects advertising pricing and provides a competitive edge in negotiations with other sports leagues.

Turner maintains that it was presented with the deal terms that the NBA was willing to accept from Amazon for streaming 64 regular-season games and at least 30 playoff games. The media company responded on Monday with a letter indicating it would match Amazon’s offer and adhere to "the same material terms and conditions." When the NBA declined to honor this match, Turner proceeded with the lawsuit.

The outcome of the lawsuit may depend on how the court interprets matching rights, observed Emarketer senior analyst Ross Benes. He pointed out that while Warner Bros Discovery claims it can match Amazon’s price, the NBA argues that the offer pertains to streaming distribution rather than traditional television rights. "The precedent on digital versus linear rights is not settled, so the outcome will be in the eye of the beholder," he noted.

Douglas Arthur, an analyst with Huber Research, raised questions about whether Turner could profit under the NBA’s new deal, which represents a $700 million increase compared to its existing contract. He commented in an investor note, "To make money on the step-up, subscriber fees would have to go up considerably, and WBD would have to hope that ad contracts would increase as well."