Warner Bros. Discovery is suing the NBA in New York upon the rejection of its matching rights that it exercised to obtain television broadcasting rights for the league, according to a report from David Faber of CNBC. This development comes one day after the NBA officially announced its new 11-year media rights deal with The Walt Disney Company, NBCUniversal and Amazon reportedly worth a collective $77 billion.
Entities owned by Warner Bros. Discovery had been in partnership with the league since the 1984 season, something that is now slated to come to an end after next year. The company has NBA broadcasting rights through the conclusion of next season, something that may take place as litigation plays out in court.
Faber classified the situation as an “interesting moment” with Warner Bros. Discovery suing its one-time partner while airing its games next season. The five-page matching rights provision in the existing contract that began in 2016 provided the company with backend rights, and it felt those were applicable to the Amazon package.
The NBA turned down this claim and agreed to terms with Amazon, which will distribute 66 NBA regular-season games each season in addition to playoff matchups. The company will stream one of the two Conference Finals series in six of the 11 years on a rotating basis with NBCUniversal starting in the 2026-27 season, along with serving as the home of NBA League Pass and distributing games globally. Combined with rights to WNBA and NBA G League games, Amazon is reportedly paying $1.93 billion annually.
“We should point out Warner Bros. coming back with an offer that I was told was around $1.7 [billion], but for only the NBA games, so they say it matched certainly on economics,” Faber reported. “They say it matched on streaming – it was going to be on Max, but yeah, they would also have TNT airing the games as well. That’s at least some concern for some out there who own the stock in terms of what becomes of TNT without the NBA.”
Warner Bros. Discovery currently carries a $39 billion debt load and is reported to have lost two-thirds of its value since being formed out of a merger in April 2022. Data from Nielsen Media Research conveys that TNT and TBS reach 66 million homes as cord-cutting continues around the United States with changing methods of television consumption. The company’s Max streaming platform, however, has 100 million users, leading Warner Bros. Discovery reportedly believing that it could provide a comparable package to match Amazon. Nonetheless, Faber explained that the company feels it has a duty to its shareholders to defend itself in this situation.
“…[The] hope is they either come away with some money, they come away with the game themselves or they lose, but in their opinion, it seems as though they have very little to lose by litigating,” Faber explained, “and they feel like there were any number of things that were already set against them, including things like the requirement of three years of fees being in escrow, for example, which would have been very difficult for Warner Bros. Discovery to do, and it is something that was agreed upon by the other participants here.”
According to its most recent earnings report, Warner Bros. Discovery had an adjusted EBITDA of $2.1 billion with $390 million in free cash flow. The company also repaid $1.1 billion of debt during fiscal Q1 and ended it with $3.4 billion of cash on hand. Faber explained that the company offered YouTube as a potential partner for other aspects of the deal and were trying to figure out a situation to proceed. The NBA, he said, was not interested in doing that; however, more information could be divulged through the discovery phase of litigation.
“Discovery… can find a lot,” Faber said. “Are there emails? Are there texts that was going to show there was a predisposition all the way?”
