This game may not launch.
The NBA took steps Friday to block an ambitious legal effort by Warner Bros. Discovery to force the NBA to hand back some of its media rights. In a filing with New York State Supreme Court, the NBA asked for the lawsuit to be dismissed, arguing that Warner didn’t actually meet the terms of the game packages it was earmarked for Amazon Prime Video and detailed in a letter how the longtime sports media ally had attempted to strike an alternative deal with Amazon that would not actually offer the same content.
Spokespeople for the NBA and Warner Bros.’ TNT Sports did not immediately respond to requests for comment. The NBA said in the filing that it intends to seek dismissal of the lawsuit at a hearing in New York City on Oct. 4.
The NBA signed new 11-year broadcast-rights deals with Disney, NBCUniversal and Amazon in July, rejecting an offer from Warner Bros. to remain a media partner after nearly three decades of relationships. The new agreements take effect after the NBA’s next season.
One of the documents submitted is a July 24, 2024 letter from NBA head of media distribution William Koenig to Warner’s TNT Sports president Lewis Silberwasser. In the letter, Koenig wrote that the deal hinged solely on streaming distribution, and that Warner’s bid included both the TNT cable network and the Max streaming service, rendering Warner’s efforts to rival Amazon’s package “ineligible.”
“While TBS claimed to have matched Amazon’s proposal, it changed and did not accept numerous other material terms of Amazon’s proposal. Each of these changes provides an independent basis for concluding that it was a failure to adequately match,” Koenig said.
Warner Bros. Discovery badly needs NBA games. They’re a key component of TNT’s schedule and generate live concurrent viewership coveted by advertisers and cable distributors. Warner took a $9.1 billion write-down on its cable-TV portfolio earlier this month, citing the possibility of no NBA games as one of the main factors in the decision.
Koenig also detailed how Amazon agreed to ensure payments to the league, saying, “The establishment of a rights fee escrow account, into which licensees are required to deposit and maintain three seasons’ worth of rights fees on an ongoing basis, from which rights fees will be automatically paid.”
The NBA will be paid according to an agreed-upon payment schedule (which will avoid potential payment delays).” Amazon also said it “committed to maintaining an investment grade or above credit rating, and its failure to meet this commitment will result in termination rights in favor of the NBA and related termination fees being payable to the NBA.”
However, Koenig said Warner Bros. had rejected those conditions and instead offered to “provide a letter of credit to the NBA as alternative collateral,” making the letter of credit available only in the event of “a failure to timely make royalties payments, which would cause delays in the NBA receiving funds.”
NBA executives also promised that Amazon will promote NBA games across its widest range of sports programming, including “Thursday Night Football,” while Warner Bros. Discovery will “
Mandatory promotion of the NBA among “major sports leagues” broadcast on TNT or Max. TBS expanded the defined term to include NASCAR and certain college sporting events, making this promotional activity less valuable to the NBA.
Warner has been bolstering its sports portfolio in recent weeks, acquiring rights to the French Open and several college sports. “Warner has been on an active sports rights shopping spree recently, securing rights to certain College Football Playoff games, the French Open, Big East college basketball and NASCAR, but remains cautious about whether these will be enough to offset the loss of the NBA in the eyes of linear distributors,” Robert Fishman, an analyst at independent MoffettNathanson, said in a research note in early August.