Warner Bros. Discovery Sues NBA Over Rejected Matching Rights Offer
Warner Bros. Discovery has initiated a lawsuit against the National Basketball Association (NBA) in the Supreme Court of the State of New York, seeking to maintain its longstanding broadcast rights for NBA games. This legal action comes after the NBA declined Warner's bid to match a lucrative deal the league secured with Amazon, Disney, and NBCUniversal for the broadcasting of NBA games starting in 2026.
For over three decades, Warner Bros. Discovery, through its Turner Sports unit, has enjoyed a partnership with the NBA, broadcasting games on its networks such as TNT. The current contention arose after the NBA announced new 11-year agreements valued at approximately $77 billion. Warner Bros. Discovery contends that its existing agreement with the NBA grants matching rights to retain its broadcast privileges.
Warner Bros. Discovery asserts that it utilized its matching rights by agreeing to a deal similar to Amazon’s, which includes regular-season games, the in-season tournament, and some playoff games. The company intended to broadcast these games on TNT and simulcast them on its streaming service, Max. However, the NBA rejected Warner's matching offer, arguing that it was not equivalent to Amazon's streaming-only distribution model. The league pointed to the contractual language from the 2014 agreement, which stipulates that a matching offer must adhere to the same distribution form as the third-party offer.
The legal dispute centers on the interpretation of the "matching rights" clause in the 2014 contract. This clause is designed to give an incumbent broadcaster the "right of last refusal," allowing it to "match any ‘Third Party Offer’ for future NBA telecast rights.” Warner Bros. Discovery contends that it fulfilled this requirement by matching the “same material terms and conditions” of Amazon's offer, despite the differences in distribution platforms.
The company argued that the NBA's refusal to honor its matching rights would cause "irreparable harm," including “the loss of a unique and valuable asset, goodwill, key talent, subscribers, and significant affiliate fees and advertising revenues.”
As reported by CNBC, Warner Bros. Discovery is seeking both “preliminary and permanent injunctive relief” to prevent the NBA from granting the broadcast rights to Amazon or any other party. Additionally, the company has indicated that if injunctive relief is not granted, it will pursue "monetary damages" to compensate for the loss of these valuable rights.
