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Article/Intelligence

Warner Bros. Discovery, TBS Sue NBA Over Entry Into New Agreement With Amazon

Relevant Document:
Complaint

Warner Bros. Discovery and wholly owned subsidiary Turner Broadcasting System, or TBS, filed a lawsuit in New York state court today against the National Basketball Association to enforce TBS’ rights to distribute NBA games through the 2035-36 season. The complaint, which is redacted, comes on the heels of the NBA’s July 24 announcement of its entry into new agreements with NBCUniversal and Amazon to telecast NBA games beginning with the 2025-26 season and running through the 2035-36 season.

TBS contends that the NBA has breached the TBS/NBA distribution agreement and “deliberately refused to honor” TBS’ rights to match a third party offer for future NBA telecast rights. Specifically, the complaint says TBS “timely exercised its matching rights by accepting a Third Party Offer on the same material terms and conditions that the NBA was willing to accept from Amazon.”

According to the complaint, the TBS/NBA agreement includes a “Matching Rights Exhibit,” or MRE, that says the “NBA may ‘not enter into an agreement or agreements with any third party or parties’ relating to future NBA telecast rights ‘without first giving’ TBS an opportunity to accept a ‘Third Party Offer.’” If TBS elects to accept the third party offer, the MRE says “TBS, not the third party, ‘shall have the right and obligation’ to exercise the NBA distribution rights ‘provided for in the Third Party Offer.’”

TBS asserts the NBA presented it with the Amazon terms on July 17, and it responded to the NBA on July 22 stating its decision to match the Amazon Offer and agreement to enter into a licensing agreement on the same material terms and conditions. However, the NBA has refused to honor TBS’ match and has purported to grant the rights to Amazon in direct breach of the TBS agreement, the complaint argues.

The NBA disagrees with TBS and released a concurrent statement with its July 24 announcement saying that TBS’ proposal did not match the terms of the Amazon agreement.

TBS stresses the “intangible and incalculable benefits” of the distribution rights to its business, adding that unless the NBA is ordered to specifically perform its obligations before the 2025-26 season, TBS will lose those valuable rights that its agreement was “designed to protect.”

The complaint seeks: "(a) a judicial declaration that TBS Matched the Amazon Offer in accordance with the Agreement (including the MRE); (b) specific performance of the NBA’s obligations under the Agreement (including the MRE); (c) preliminary and permanent injunctive relief to prohibit the NBA from licensing these unique and irreplaceable rights to any third party; and (d) if and to the extent that injunctive and equitable relief is not granted, or is not sufficient to provide a full and complete remedy, monetary damages.”