Saturday 24 August 2024

Deadline: NBA Slam Dunks Warner Bros Discovery, Says Company Lacks Reach & Cash To Challenge Amazon TV Rights Deal; TNT Insists League’s “Actions Are Unjustified” As Court Battle Heats Up

Story from Deadline:

Unless someone calls a time out soon, the legal game between the NBA and Warner Bros Discovery over small-screen basketball rights that the still David Zaslav-run media company turned over looks set to go down to some serious 2-for-1.

As promised, the Adam Silver-led league has responded with force to Warner Bros Discovery’s heavily redacted July 26-filed suit over the rights Amazon was awarded earlier this year in a multi-outlet $77 billion deal for the 2025-26 season and beyond. In Hail Mary mode, the stock-cratering Warner Bros Discovery and subsidiary Turner Broadcasting System desire a court order to stop the Jeff Bezos-owned streamer from even showing games until this is all resolved.

Unsurprisingly, the NBA, which has made deals with ABC, NBC and Amazon for the next 11 years for the league and the WNBA, want to block that move. In fact, the NBA want to shut this whole business down with its soon to be ex-partner of nearly 30 years.

In a late night motion for dismissal to be argued in person in New York state court on October 4, just under three weeks before the 79th NBA regular season tip offs, the NBA made it clear it is not playing games. To put it simply, the gist of the league’s argument is: Sorry Warner Bros Discovery, but you’re just not big enough for the NBA, and it looks like you don’t have the cash.

“For example, to ensure the financial security of billions of dollars of rights fee payments over the deal’s 11-year term, Amazon agreed, inter alia, to maintain an escrow account from which rights fees will automatically be paid to the NBA as they become due,” the supporting memorandum of law from the league’s Sullivan & Cromwell lawyers reads. “TBS eliminated this protection by giving itself the option to instead provide the NBA with syndicated letters of credit that the NBA can access only if TBS’s payments are late. That is not even close to the same thing.”

If that didn’t hurt the unsteady Warner Bros Discovery, which took a painful $9.1 billion write-down recently in part because of losing its long time NBA rights, the league’s declaration that the legacy media giant just doesn’t have the reach and scope for the 21st century really must wound.

Rubbing salt in the wound, the NBA also allege that Warner Bros Discovery lack the heft to effectively promote league games on either TNT or streamer Max – unlike Amazon, who are going to utilize their well-watched NFL Thursday Night Football property.

Sinking to numerous all-time lows in past months, Warner Bros Discovery’s stock saw a small uptick upon closing Friday. Still, that must be small comfort for investors like John Malone. The company’s stock has fallen about 70% since the once AT&T-owned Warner Bros and Discovery merged under Zaslav’s leadership in April 2022. Adding insult to injury, a league source tell me that Zas “shot himself in the foot” in regards to basketball rights renewal when he quipped a that “we don’t have to have the NBA” a couple of years ago.

Now, with the much heralded Disney-Fox-Warner Bros Discovery Venu sports streaming joint venture on hold due to a court challenge by FuboTV, Warner Bros Discovery could really use those NBA rights for its struggling bottom line.

In that fight, Warner Bros Discovery says it is in it to win it — no matter how much blood is left on the court. As TNT Sports spokesperson told Deadline this morning.

''We maintain our position that the NBA’s actions are unjustified, and we strongly believe we have fulfilled our contractual right to match the third-party offer. Not only is it our contractual right, but it is in the best interest of the fans who want to continue to enjoy our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed platforms including TNT and Max. We will file our opposition in the coming weeks.''

As a side note, that October 4 hearing on the NBA’s bid to have Warner Bros Discovery’s suit thrown out will occur on the same day that The LA Lakers face the Minnesota Timberwolves in a pre-season match-up in Palm Springs, and the 2024 champs Boston Celtic play the 2023 champs the Denver Nuggets in Abu Dhabi. Neither of those games are going to be on TNT. However, in the last season TNT has NBA games, the outlet will have the Lakers and Timberwolves official opening night game on October 22.

That looks to be the outlet’s last NBA opening night in a long long time.

© 2024 Deadline.