On Friday, Warner Bros Discovery (WBD.O) and its sports division, Turner Broadcasting System, filed a lawsuit against the National Basketball Association (NBA) in New York, challenging the league’s rejection of their media rights bid. Warner Bros Discovery contends that the NBA’s refusal to honor Turner’s right to match third-party offers violated their agreement.
TNT Sports, a Turner brand, defended its position, emphasizing that their right to match bids is crucial not only contractually but also for the benefit of fans who enjoy NBA content.
NBA spokesman Mike Bass dismissed the claims from Warner Bros Discovery as baseless. The NBA recently finalized an 11-year, $77 billion deal with Walt Disney’s ESPN, Comcast’s NBCUniversal, and Amazon.com. The deal led the NBA to turn down a last-minute offer from TNT Sports, ending a nearly 40-year relationship with Turner after the upcoming season.
Turner argued that it has significantly invested in NBA rights, production, and talent, including the acclaimed “Inside the NBA” show. They asserted that NBA games are vital for attracting viewers, boosting ratings, and generating advertising revenue, impacting negotiations with other leagues.
Turner claimed that the NBA provided them with Amazon’s terms for streaming 64 regular-season games and at least 30 playoff games. Turner responded with a letter agreeing to match Amazon’s offer, but the NBA’s refusal to honor this led to the legal action.
The outcome of the lawsuit may hinge on how the court interprets matching rights, as noted by Emarketer senior analyst Ross Benes. He highlighted that the distinction between digital and traditional TV rights remains ambiguous.
Huber Research analyst Douglas Arthur questioned whether Turner could remain profitable under the new NBA deal, which would increase their costs by $700 million compared to the current contract. He suggested that Turner would need to raise subscriber fees and boost advertising revenue to offset these costs.