This game may never begin.
The NBA on Friday halted Warner Bros. Discovery’s ambitious legal battle to force the league to return some of its media rights to the company. In documents filed with New York State Supreme Court, the NBA asked for the lawsuit to be dismissed on the grounds that Warner had actually failed to meet the terms of a gaming package intended for Amazon Prime Video. In a letter, it detailed how the company, its former longtime ally in the sports media industry, had attempted to negotiate an alternative contract that in reality did not offer the same benefits as Amazon.
Spokespeople for the NBA and Warner’s TNT Sports could not immediately respond to requests seeking comment. The NBA said in its filings that it intends to file a motion to dismiss the lawsuit at an Oct. 4 hearing in New York City.
The NBA awarded new 11-year rights deals to Disney, NBCUniversal and Amazon in July, rejecting an offer from Warner to remain among its media partners after a relationship spanning nearly three decades. The new deals will take effect after the next NBA season.
One of the documents filed is a July 24, 2024, letter from William Koenig, the NBA’s head of media distribution, to Luis Silberwasser, president of Warner’s TNT Sports. In the letter, Koenig says Warner’s efforts to match Amazon’s package are “out of the question” because the deal depends only on distribution via streaming and Warner’s offer includes both the TNT cable network and the Max streaming service.
“In its purported adjustment to the Amazon offer, TBS also modified – and thereby failed to accept – numerous other material terms of the Amazon offer, each of which constitutes an independent reason for concluding that it failed to make an appropriate adjustment,” Koenig said.
Koenig also provided details of how Amazon agreed to ensure the league’s payment, citing “the establishment of a rights fee escrow account into which the licensee must deposit and manage rights fee payments for three seasons and from which rights fees will be automatically
paid to the NBA in accordance with the agreed payment schedule (thereby avoiding potential defaults).” Amazon has also “committed to maintaining a credit rating above investment grade, with failure to meet this obligation giving rise to a right of termination in favor of the NBA and an associated severance payment to the NBA.”
In the meantime, Koenig said, Warner has not complied with these conditions, but has offered to “provide the NBA with letters of credit as an alternative form of security.” Warner will only make these available if it first “fails to make a timely payment of the license fee (thereby causing an additional delay before the NBA receives the funds).”
The NBA executive also pointed out that Amazon has promised to promote NBA games in its most widely-reaching sports titles, including “Thursday Night Football,” while Warner Bros. Discovery “has a
Obligation to promote the NBA on every “major sporting league” broadcast on TNT or Max, a defined term that TBS has expanded to include NASCAR and certain college sporting events — thereby making that advertising commitment less valuable to the NBA.”
More to follow …
