The National Basketball Association (NBA) this week filed a motion to dismiss a lawsuit brought by Warner Bros Discovery (WBD) over a proposal to match certain financial terms for continued carriage of professional basketball games on TNT Sports.
Last month, the NBA announced a new 11-year media rights deal with the Walt Disney Company, Comcast’s NBC Sports and Amazon’s Prime Video for national rights to its games, starting with the 2025-26 basketball season.
The deal with Amazon essentially takes over a package of basketball games that had aired on TNT Sports through the league’s current telecast contract, which runs out at the conclusion of this upcoming season.
WBD submitted a bid to counter one made by Prime Video, as it was allowed to do under the current in-force contract. The NBA rejected the bid, saying Amazon’s offer was substantially better. WBD later sued the NBA, saying the sports league had a contractual duty to weigh its offer against the one made by Amazon, which WBD said the league did not do. The Desk was the first to report WBD was considering a lawsuit against the league.
As WBD puts it, the league erred in finding Amazon’s deal more-favorable because games could be distributed on Prime Video. WBD said games airing on TNT are also distributed through its own streaming service, Max.
But the league says WBD didn’t go far enough in negotiating terms for streaming as part of its matching bid. Instead, WBD “purported to give itself the right to distribute games over cable television — and, if it prefers, exclusively over cable television,” the league said in its motion to dismiss this week.
In that situation, the league says WBD’s offer would have been comparable to one made by Comcast’s NBC Sports, though it would have had to make a “more expensive” bid.
“[WBD] elected not to do so, attempting instead to save billions by combining Amazon’s lower price with the linear television rights granted to NBC,” the league said.
In other words, WBD targeted the wrong offer with its matching bid, according to the league. It did so because it was trying to save money by pursuing linear TV rights for its cable channel, rather than competing against NBC’s offer for a separate but comparable package of games.
“Far from accepting each term of Amazon’s offer, [WBD]’s revisions constituted a counteroffer that the NBA was free to reject,” the league asserts.
The motion filed by the league this week offers some insight into what was on the table and what WBD ultimately offered.
First, Amazon agreed to front around $5.4 billion, comparable to three years worth of rights payments, by placing it into an escrow account, which the NBA can draw from as the NBA sees fit. WBD’s offer would have covered the same amount of money, but rather than placing it in escrow, WBD sent the NBA a letter of credit that stood as proof it could back the payment.
Second, WBD’s line of credit was to replace direct cash disbursements for rights fees in the event that the broadcaster was late on making payments, the league said. In that sense, the agreement was “fundamentally alter[ed]” compared to what Amazon was offering.
Third, Amazon’s agreement with the league includes certain minimum reach agreements, which includes a formula that counts subscribers to Prime Video, which is included with Amazon’s Prime membership service. The NBA says WBD wanted to change the formula for reach by counting subscribers to TNT on cable and satellite, as well as Max, where live games are offered through an add-on called B/R Sports. (The add-on has been free since it launched last year, though WBD says it will eventually charge $10 per month for the feature.)
WBD also apparently wanted to include a third party subscription service toward its reach formula. The service wasn’t named, but it is almost certainly Venu Sports, the platform that is being developed by WBD and two other broadcasters, Disney’s ESPN and Fox Corporation.
Venu Sports was supposed to launch this month, with sports-inclusive channels from all three broadcasters, including TBS, TNT and Tru TV. The service was ultimately blocked from rolling out by a federal judge overseeing a legal challenge against the broadcasters by pay TV platform Fubo, which argues the distribution structure of Venu Sports violates antitrust laws. In her order on the matter, the judge overseeing the case said Fubo was likely to prevail in the matter.
Finally, the NBA said Amazon’s deal included certain commitments to promote pro basketball games during the National Football League’s “Thursday Night Football,” which it broadcasts through Prime Video and Twitch. WBD apparently offered a substitution term that allowed it to promote NBA games during other “major sporting league” broadcasts. WBD holds the rights to games played by Major League Baseball, the National Women’s Soccer League, competitions from NASCAR and some college sports, but not professional football, which tends to be some of the most-watched sports on television in the United States.
A spokesperson for WBD said it intends to file an opposition to the NBA’s motion.
“Not only is it our contractual right, 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 distribution platforms including TNT and Max,” the spokesperson told reporters late Friday evening. “We will file our opposition in the coming weeks.”
