The NBA doubled down yesterday on its hardline stance that
Warner Bros. Discovery’s matching rights lawsuit against the league has no merit, asking the New York Supreme Court to again dismiss the case in the early pleading stage.
In response to a WBD claim last month that the case should move toward trial, the NBA’s lawyers continued to assert that TBS failed to match the requisite line-by-line terms of Amazon’s $1.93B annual media rights bid, while also citing layered precedence for the litigation to be tossed out.
At the core of the NBA’s written dissertation Wednesday was that Turner -- in an effort to match Amazon’s offer -- "revised eight of the Amazon offer’s 27 sections, changed 11 definitions, struck nearly 300 words, and added over 270 new words. Plaintiffs’ redline was a counteroffer, not a match. That should be the end of this case."
The league’s attorneys from Sullivan & Cromwell produced several arguments to discredit WBD’s proclamation that it did in fact match Amazon. For instance, Turner had claimed it did not need to intricately match every line of Amazon’s offer, and, in direct response, the NBA cited USA Cable v. World Wrestling Fed ‘n Entm’t from 2000, which stated, "New York law requires that the holder of right of first refusal much match exactly all the materials of a third party offer with respect to the relevant subject matter of the original contract."
Also, in reference to WBD’s claim that the NBA negotiated in "bad faith" by inserting "poison pills" into Amazon’s offer (such as a $3B-plus rolling escrow account and NBA promotions during Amazon’s "Thursday Night Football" broadcasts), the league cited one of its own cases from 1973, Am. Broadcast Co. vs Kennedy. That lawsuit from over 50 years ago was filed by ABC after CBS tried to steal ABC’s NBA package away by requiring Saturday afternoon NBA broadcasts in the fall at a time ABC showed college football -- which ABC considered a poison pill. Yesterday, the NBA referred directly to the judgment from that case, which stated, "Every competitor has a right to win a contract by offering terms which its competitors can’t meet."
Going even further, the league’s lawyers asserted that to match Amazon, Turner would need to do so with its standalone streaming service, Max, instead of attempting to match with Max and its linear channel TNT. The NBA’s point was that WBD -- in its request to have the case continue -- ignored the fact that Max has only been able to simulcast TNT’s NBA games through a separate contract with the league that does not contain matching rights. So, there is no way Max could match Amazon to begin with.
Finally, WBD had maintained last month that there was no precedence for a case to be tossed out at this early pleadings stage. But the league disputed that today, citing a matching rights case from 1980, Duane Sales, Inc. v. Carmel, which was thrown out in a pleading stage because the matching right terms were changed by the plaintiff -- similar to what the NBA claims WBD has done now.
N.Y. Supreme Court Judge
Joel Cohen will either dismiss the case, move the case forward or schedule oral arguments before making a final ruling. If it ultimately goes to trial -- though insiders expect a settlement if the judge does not toss the case out -- both sides have agreed that the trial would take place no later than April of 2025. The potential drawback, though, is that an appeal could delay the case into the 2025-26 season, problematic because Amazon would have already begun broadcasting NBA games.
