Lawsuit, Settlement, Compromise? What Are Warner Bros. Discovery’s Next Steps in NBA Rights Drama?
WBD made no secret of its feelings about the league’s rejection of its matching rights in a statement Wednesday evening.
As most observers following the story of the NBA’s national broadcasting rights have been prognosticating, TNT’s time as a league partner appears to be over. On Wednesday, the NBA served notice to WBD that it was rejecting its “matching” offer, and would be selling the third of its three national rights packages to Amazon’s Prime Video for $1.8 billion per season. That leaves WBD with limited options, but the company still can’t be counted out as an NBA distribution partner just yet.
Key Details:
- In a statement, WBD pledged to “take appropriate action” in response to the rejection of its matching offer.
- Sources have said that NBA commissioner Adam Silver has been expecting a lawsuit from WBD for some time.
- A suit could be a ploy to coax a face-saving settlement out of the league.
WBD’s attempt to match Amazon’s $1.8 billion per season bid for the NBA’s “C” rights package has already gotten fairly messy. Amazon took the step of pledging that it would pay three years’ worth of rights fees to the league upfront in a last-minute attempt to ensure WBD could not match its financial terms, but WBD reportedly lined up outside financing so it could plunk down the same amount of cash if need be.
Had WBD not taken this step, it would have been easier for the NBA to argue in court that it did not consider WBD’s counter a true matching offer. But the league is still planning to make its case along those lines if WBD sues, as most in media analysis now expect, especially considering the content of the statement that the company released Wednesday regarding the rejection of its match attempt.
“We have matched the Amazon offer, as we have a contractual right to do, and do not believe the NBA can reject it,” WBD said. “In doing so, they are rejecting the many fans who continue to show their unwavering support for our best-in-class coverage, delivered through the full combined reach of WBD’s video-first distribution platforms — including TNT, home to our four-decade partnership with the league, and Max, our leading streaming service. We think they have grossly misinterpreted our contractual rights with respect to the 2025-26 season and beyond, and we will take appropriate action. We look forward, however, to another great season of the NBA on TNT and Max including our iconic Inside the NBA.”
If it does intend to carry a lawsuit through to the end, WBD will have to counter NBA arguments that it cannot match the global reach of Prime Video, even if it can come up with the same amount of money per season that Amazon is willing to pay. NBA commissioner Adam Silver has reportedly been expecting a suit for some time, and has the Association's lawyers well prepared.
Is WBD Just Angling for a Settlement?
The possibility exists that WBD’s lawsuit is more in the name of winning a concession from the NBA than it is about winning back rights. WBD has a heavy debt load of $39 billion, and not having an expensive NBA payment to make each year could be a boon for the company, particularly as it has added a large selection of new sports options in recent months.
Perhaps a settlement would see the NBA throw a little cash WBD’s way? This could be done in a variety of ways; the league could simply cut WBD a check, or it could pull control of the NBA.com website and NBA TV channel back from WBD in exchange for a fee. Maybe the league would consent to streaming NBA TV games on Max simultaneously with their live broadcasts?
There may be a settlement option involving the NBA’s local rights. Former Dallas Mavericks majority owner Mark Cuban suggested WBD try to pursue local NBA rights currently held by Diamond Sports Group, and a settlement agreement built on a plan to offer WBD the local rights to 15 teams currently held by DSG if the company is liquidated in bankruptcy court is a possibility, albeit a remote one.
There is also every chance that WBD means to carry a potential lawsuit through to the end, win or lose. If that ends up happening, it could be months before the question of whether Prime Video will become an NBA broadcast partner or not starting in 2025 is answered.
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