NEW YORK—The NBA has filed a motion to dismiss a lawsuit by Warner Bros. Discovery that sought to overturn the NBA’s decision to grant rights to a package of NBA games to Amazon.
WBD's Turner Sports has NBA rights through the end of the 2024-25 season but lost out in the bidding for a new package of rights, which were granted to Disney, NBCUniversal and Amazon.
In a July lawsuit filed in the Supreme Court of the State of New York County Of New York, Commercial Division, WBD had argued that its existing NBA contract gave it the right to match any other offer and that the NBA has improperly rejected its matching offer.
In response, the NBA argued that Turner Sport had significantly altered the terms of the deal with Amazon in its response and that the NBA correctly rejected WBDs offer.
“Plaintiffs’ claims fail at the outset because the MRE did not give TBS the right to match Amazon’s offer,” the NBA brief said. “As the Complaint acknowledges, TBS’s matching rights are limited to third- party offers relating to NBA game distribution rights that TBS `currently enjoy[s]’ under the NBA/TBS Agreement. TBS does not `currently enjoy’ the rights covered by Amazon’s offer—namely, rights to distribute live NBA games on a disaggregated, standalone basis via an SVOD service streamed over the Internet. Instead, TBS’s current rights are limited to distributing games as part of a linear cable television network, together with the rest of the network’s programming.”
The Turner Sports offer also “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 brief noted. “Controlling New York law forecloses TBS’s attempt to rewrite the terms of Amazon’s offer and then “accept” those rewritten terms.”
The NBA also noted that WBD did not meet the credit terms for the deal as its debts is currently rated below investment grade.
The full NBA brief can be found here.
In an analysis of the lawsuit and the NBA brief, analysts at LightShed Partners noted: “The NBA cited a 1970 NBA/ABC lawsuit, also over media rights, that appears problematic for Turner’s lawsuit: `every competitor has a right to attempt to win a contract by offering terms which its competitors can’t meet, and similarly NBA was … free to seek and accept such terms as were consistent with its legitimate business interests.’ If the NBA can demonstrate legitimate business reasons for each of the items spelled out in the Amazon contract (regardless of how onerous they are for WBD to match), WBD faces a steep uphill battle to enforce its matching rights. WBD will need to show substantial case law to support its attempted match, which nullifies all the NBA’s matching issues, otherwise a dismissal feels likely before year-end 2024.”
