Warner Bros. Discovery sues NBA after league hands telecast rights to Amazon

Warner Bros. Discovery (NASDAQ:WBD) has filed a lawsuit against the NBA, saying that the basketball league was in breach of contract after it signed a broadcasting deal with Amazon, according to a court complaint filed on Friday.

The suit alleged that Turner Broadcasting System Inc., now a unit of WBD, has been telecasting NBA games for nearly 40 years, and the company was within its legal capacity to match a third-party offer for future telecast rights.

It stated that TBS timely exercised matching rights on the terms and conditions as Amazon, but the NBA “deliberately refused to honor TBS’s rights.”

The suit was filed in the Supreme Court of the State of New York.

The NBA reached an 11-year, $76B-plus package deal last week with ESPN (DIS), NBC (CMCSA) and Amazon (AMZN), leaving out multi-decade partners TNT and TBS (WBD).

But WBD exercised its incumbent matching rights, moving just at the end of a five-day window to try to match Amazon’s $1.8B piece of the deal.

Analysts at Macquarie downgraded WBD stock after the company lost renewal rights, and said NBA is important to the future success of the Max streaming service.

WBD stock was up nearly 4% in session, shares are down 27% so far this year as of Thursday’s close.