By Joe Flint
Warner Bros. Discovery filed a breach of contract suit Friday against the NBA, alleging the league violated a media-rights agreement with its TNT cable network by striking a deal with Amazon's Prime Video.
Warner sought to exercise a clause in its contract allowing it to match rival bids. The NBA rejected that move this week when it announced a set of new deals valued at $77 billion Wednesday, saying TNT's offer didn't match the terms of Amazon's.
Although Amazon's deal with the NBA is to stream games on Prime Video, TNT said in its suit that the Amazon offer is "unmistakably a third party offer" and that the league had "no right not to honor" its match.
"This should be the end of the story," the complaint said. The suit was filed in a New York court.
An NBA spokesman said in a statement, "Warner Bros. Discovery's claims are without merit and our lawyers will address them."
In parallel to the lawsuit, Warner has tasked the public-relations firm Edelman to make the case that putting games on Amazon would be anticonsumer, people familiar with the situation said. The campaign will argue that Prime Video doesn't reach a large segment of basketball fans.
Amazon declined to comment.
The suit comes just days after the NBA announced new rights deals with Disney, NBCUniversal and Amazon, effectively ending its more than three-decade relationship with TNT.
Much of the legal dispute boils down to whether putting games on a pure-play streaming platform like Amazon is fundamentally different from Warner's plan of putting them on TNT and simultaneously streaming them on its Max service.
The NBA says there is a clear difference. Warner says it has always had the right in its cable-TV deal to show games on "non-broadcast television" -- which, it says, covers any sort of streaming, like the service Amazon offers.
Warner is arguing that the NBA's streaming-only package with Amazon "makes no business sense and runs directly contrary to the NBA's own interest in maximizing viewership."
Warner also accused the NBA of negotiating in bad faith and adding provisions to contracts it struck with rivals to thwart TNT's ability to match offers. Warner said the Amazon offer included provisions that aren't "supported by any legitimate business justification." Warner didn't provide specifics about the alleged provisions.
Though Warner executives have, at times, downplayed the need for the company to carry the NBA, the suit portrays the league's content as extraordinarily valuable -- boosting advertising and distribution revenue and providing a halo that drives viewers to other TNT content. "NBA telecast rights are a unique asset that cannot be replaced," the suit said.
The new deals, which are valued at $77 billion and run 11 years, take effect after the 2024-25 NBA season, meaning TNT will still be carrying games while potentially ensnared in a legal battle with the league.
Amazon's $1.9 billion-per-year package will include 66 regular season games, including Thursday double-headers starting in January, plus Friday evening double-headers and select Saturday afternoon games.
Comcast's NBCUniversal package, valued at $2.5 billion a year, will include 100 games per regular season across NBC and Peacock, and first- and second-round playoff games and six conference finals series. Peacock will have 50 games exclusively, including some playoff games.
Disney's package, which will cost the media giant about $2.6 billion a year, consists of a smaller number of games than under its current deal. It will include 80 regular-season games per season, the NBA finals, and early-round playoff games and conference finals series in 10 seasons. Games air primarily on ESPN, with its sister broadcast network ABC also carrying select regular and postseason games.
Write to Joe Flint at Joe.Flint@wsj.com
(END) Dow Jones Newswires
July 26, 2024 14:52 ET (18:52 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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