Warner Bros Discovery sues NBA over bid for broadcast rights

By Dawn Chmielewski

(Reuters) -Warner Bros Discovery (NASDAQ:) and its sports division, Turner Broadcasting System, filed a lawsuit on Friday against the National Basketball Association in New York over the league’s rejection of its matching bid for media rights.

The media company accused the NBA of breaching its agreement in refusing to honor its right to match offers from a third party.

“We strongly believe this is not just our contractual right, but also in the best interest of fans who want to keep watching our industry-leading NBA content,” TNT Sports said in a statement.

NBA spokesman Mike Bass said Warner Bros Discovery’s claims are “without merit.”

The NBA announced on Wednesday that it had awarded Walt Disney (NYSE:)’s ESPN, Comcast-owned NBCUniversal and Amazon.com (NASDAQ:) rights to carry National Basketball Association games in an 11-year deal valued at $77 billion.

The NBA rejected a last-minute offer from TNT Sports, which it said fell short of Amazon’s proposal, ending a nearly four-decade relationship with the media company after next season.

Turner argues it has a vested interest in retaining the rights to carry the NBA’s games, saying it has invested billions of dollars for the distribution rights and hundreds of millions of dollars more in production and talent, including its Emmy-winning “Inside the NBA” show with Ernie Johnson, Charles Barkley, Shaquille O’Neal and Kenny Smith.

The media company argues the NBA games are “unique assets” that can’t easily be replaced, driving “significant viewership and ratings.” That, in turn, affects the price Turner can charge advertisers and lends competitive advantages in negotiating rights with other leagues, the company claims in its suit.

Turner said the NBA presented Turner with the deal terms it was willing to accept from Amazon for the rights to stream 64 regular season games, and at least 30 playoff games. On Monday, the media company responded with a letter stating it would match Amazon’s offer and would agree to “the same material terms and conditions.”

It said the NBA refused to honor Turner’s match, prompting it to bring the suit.