AUGUST 24: Baxter Holmes of ESPN provides more details on the NBA’s motion for a dismissal, writing that the league is arguing Warner Bros. Discovery attempted to improperly rewrite the terms of Amazon’s offer and then accept those terms.
“(Turner Broadcasting System) chose not to match NBCUniversal’s offer, which would have enabled TBS to continue distributing games via its TNT linear cable network,” the league wrote in its filing. “Instead, TBS purported to match the less-expensive Amazon offer, but only after revising it to include traditional distribution rights and making numerous other substantive changes.
“… TBS made substantive revisions to eight of the Amazon offer’s 27 sections (including revisions to 22 different subsections), changed 11 defined terms that are collectively used roughly 100 separate times, struck nearly 300 words, and added over 270 new words, substantially altering the parties’ rights and obligations in the process.
“… Far from accepting each term of Amazon’s offer, TBS’s revisions constituted a counteroffer that the NBA was free to reject.”
The NBA is asking the court to dismiss the lawsuit with prejudice, which means it couldn’t be refiled in the future, according to Holmes. More information on the league’s arguments can be found within the full ESPN story.
AUGUST 23: The NBA filed a response to Warner Bros. Discovery’s lawsuit in New York’s Supreme Court on Friday, according to Brian Steinberg of Variety, who reports that the league has sought to dismiss the suit.
Warner Bros. Discovery is the parent company of TNT Sports, the NBA’s longtime broadcast partner which didn’t reach an agreement with the league during the latest round of media rights negotiations, losing out to Disney (ESPN/ABC), NBC, and Amazon Prime Video. TNT sought to exercise its matching rights on Amazon’s offer but was rejected by the NBA.
In documents filed on Friday, the league reiterated its belief that WBD/TNT failed to match the terms of Amazon’s offer. According to Steinberg, the NBA specified several ways in which TNT’s offer differed from Amazon’s, including:
- Amazon’s deal is for distribution via streaming only, whereas WBD’s bid would include games on both the TNT cable network and the Max streaming service.
- Amazon agreed to establish a rights fee escrow account into which it will “deposit and maintain three seasons of rights fee payments on a rolling basis and from which rights fees would automatically be disbursed to the NBA on the agreed-upon payment schedule.” WBD, meanwhile, offered to provide the league with letters of credit as an alternative form of security and to only make them available if the company “failed to make a rights fee payment on a timely basis.” In other words, Amazon’s proposal provides more certainty that payments will be made on time, without the risk of delays.
- Amazon has promised to promote NBA games during its widest-reaching sports broadcasts, including Thursday Night Football (NFL). WBD “substituted an obligation to promote the NBA in any major sporting league” distributed on TNT or Max — WBD defines “major sporting league” as including NASCAR and various college sporting events, making it a less valuable commitment than Amazon’s in the NBA’s view, Steinberg explains.
As Mike Vorkunov of The Athletic previously outlined, August 23 was the deadline for the NBA to file its initial response to the lawsuit. Warner Bros. Discovery now has until September 20 to file its opposition, then the league will have until October 2 to respond again.
According to Steinberg, the NBA said in Friday’s filing that it intends to move for dismissal at an October 4 hearing in New York City.
Previous reporting has noted that neither the NBA nor WBD likely wants an extended legal battle in which private conversations could be made public during the discovery process, so a settlement of some sort remains a possibility.