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Baxter Holmes, ESPN Senior WriterAug 24, 2024, 02:18 PM ET
- Baxter Holmes (@Baxter) is a senior writer for ESPN Digital and Print, focusing on the NBA. He has covered the Lakers, the Celtics and previously worked for The Boston Globe and Los Angeles Times.
The NBA has asked the New York Supreme Court to dismiss a lawsuit by Warner Bros. Discovery, which alleged that the league breached its contract by rejecting WBD’s matching offer for a new media rights deal and instead signing with Amazon.
The league filed its motion for a dismissal late Friday, and it contained the NBA’s pointed reply on several fronts to WBD’s lawsuit filed July 26 — two days after the NBA signed a new 11-year media rights deal worth nearly $76 billion with Disney (parent company of ESPN), NBC and Amazon Prime Video that runs from the 2025-26 season through the 2035-36 season.
That new media rights deal effectively ends a nearly four-decade business relationship between the NBA and Turner, which began airing NBA games in the 1984-85 season.
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In a 28-page filing, along with supporting documents, the NBA asked the court to dismiss the lawsuit with prejudice, meaning it couldn’t be refiled in the future.
The NBA specifically argued that Warner Bros. Discovery — the parent company of Turner — attempted to improperly rewrite the terms of Amazon’s offer and then accept those terms.
“TBS chose not to match NBCUniversal’s offer, which would have enabled TBS to continue distributing games via its TNT linear cable network,” the league wrote. “Instead, TBS purported to match the less-expensive Amazon offer, but only after revising it to include traditional distribution rights and making numerous other substantive changes.”
Amazon’s offer was roughly $1.8 billion per year, and NBC’s was roughly $2.45 billion per year.
Specifically, the league said that Warner Bros. Discovery “made substantive revisions to eight of the Amazon offer’s 27 sections (including revisions to 22 different subsections), changed 11 defined terms that are collectively used roughly 100 separate times, struck nearly 300 words, and added over 270 new words, substantially altering the parties’ rights and obligations in the process.”
The NBA’s lawyers went on, arguing, “Far from accepting each term of Amazon’s offer, TBS’s revisions constituted a counteroffer that the NBA was free to reject.”
The league argued that the matching rights that Warner Bros. Discovery cited from the NBA’s 2014 media rights agreement with TBS were limited to distributing games only through its linear cable television network, along with the rest of its programming, and not on a standalone streaming service.
In its complaint, Warner Bros. Discovery noted that it also streams games on Max, but the NBA argued Friday that the agreement for WBD to stream those games stems from a deal between NBA Media Ventures and WBD subsidiary Bleacher Report that does not contain matching rights.
“Even if TBS did have the right to match Amazon’s offer, it certainly did not have the right to fundamentally change the method of distribution required by Amazon’s offer, the NBA’s first ‘streaming national media rights deal,'” the NBA’s lawyers wrote.
The NBA continued, “If TBS wanted linear TV distribution rights, it could have matched a separate more expensive third-party offer from NBC, but TBS elected not to do so, attempting instead to save billions of dollars by combining Amazon’s lower price with the linear television rights granted to NBC.”
Additionally, the NBA also said that Warner Bros. Discovery failed to match Amazon’s commitment to pay roughly three years of its right fees — roughly $5.4 billion — up front in an escrow account.
“TBS eliminated this protection by giving itself the option to instead provide the NBA with syndicated letters of credit that the NBA can access only if TBS’s payments are late,” the NBA wrote. “That is not even close to the same thing.”
On July 17, the NBA said it had presented TBS with Amazon’s offer.
On July 22, TBS said it had responded to the offer and matched its terms, which the NBA declined to accept.
Two days later, on July 24, the NBA responded to TBS and outlined several reasons — which were cited in its court filings Friday — that its response was not, in fact, a match.
Those reasons also included a minimum reach commitment — in terms of the total number of subscribers — that Amazon offered as well as a formula for measuring that commitment.
It also referenced marketing and promotional commitments Amazon had made.
“The response made by TBS does not qualify as a match,” wrote Bill Koenig, president of NBA global content and media distribution, in a letter to Luis Silberwasser, the TNT Sports chair. The letter was filed as part of the NBA’s motion to dismiss the lawsuit.
As part of the new media rights deal with the NBA, Amazon Prime Video will carry games on Friday nights, select Saturday afternoons and Thursday night doubleheaders that will begin after the conclusion of Prime Video’s “Thursday Night Football” schedule.
Amazon’s package also includes at least one game on Black Friday and the quarterfinals, semifinals and championship game of the league’s in-season tournament, the NBA Cup. Prime Video will also take over the NBA League Pass package from Warner Bros. Discovery.
Citing New York law, the NBA also argued that all of WBD’s claims should also be dismissed because Warner Bros. Discovery was not a party in the 2014 agreement between the league and TBS. TNT Sports, in a statement, maintained its position and argued that it fulfilled its contractual right to match a third-party offer.
“Not only is it our contractual right,” the TNT Sports statement continued, “but it is in the best interest of the fans who want to continue to enjoy our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed platforms including TNT and Max. We will file our opposition in the coming weeks.”
Warner Bros. Discovery has until Sept. 20 to respond.
