In Context:

• • The NBA on TNT is a marquee sports property, on par with top offerings like the NFL on networks or Olympics on NBC. Winning the rights is a crown jewel.
  • Sports broadcasting contracts typically span many years, so these 2025-2036 rights will shape the NBA’s TV future for the next decade+.
  • TNT pays over $1 billion annually for NBA rights, so billions are at stake in the renewal. It’s also about prestige, brand identity, attracting talent and advertisers.
  • Incumbent matching rights give current partners like TNT an advantage in keeping the relationship going long-term. The NBA can’t just ignore those terms.
  • Digital and streaming are a new battleground as tech giants like Amazon get into sports. But TV networks still pay the biggest fees for premium rights.

The Stakes:

• • For TNT/WBD, losing NBA rights means giving up a tentpole property that drives ratings, ad revenue, subscriber fees. Hard to replace that caliber of content.
  • The NBA could gain new reach and tech capabilities with Amazon but risks fan backlash if games are harder to access. Billions on the line either way.
  • Competing leagues and media properties are watching to see how digital stacks up vs. legacy TV in the bidding war. Could shift the balance of power.
  • TNT’s brand identity and negotiating position with MVPDs would take a major hit without the NBA. Affects leverage across their whole business.
  • On-air talent, production staff, advertisers, arena leases and more are tied to the long-term NBA deal. Impacts the whole sports ecosystem, not just TNT and the league.

Key Takeaways:

• • The TNT-NBA relationship spans decades, with billions invested on both sides. Not just another renewal negotiation.
  • These 9-year, 11-year type media deals set the course for the league’s financial future. Astronomically consequential decision.
  • Amazon’s entrance into the fray highlights a transformative shift in the media landscape. Digital players coming for crown jewel sports rights.
  • TNT has contractual matching rights as an incumbent rightsholder. The dispute hinges on if they properly exercised those.
  • Ripple effects could be massive – money, distribution, branding, labor, advertising, tech. A tipping point for the whole industry.

Examining the Contract Language:

• • Section B.1(a) of the Matching Rights Exhibit: NBA “shall not enter into an agreement or agreements with any third party or parties” for the defined rights “without first giving… the Incumbents… a five (5) day opportunity (‘Match Window’) to enter into a license agreement or license agreements with NBA on the terms and conditions offered to such third party or parties (each, a ‘Third Party Offer’).”
  • Section B.1(b): “If an Incumbent accepts a Third Party Offer by entering into a license agreement on the terms and conditions provided for in the Third Party Offer during the Match Window (a ‘Match’), such Incumbent shall have the right and obligation, subject to the terms of Paragraph B. and C. below, to exercise the [rights] provided for in the Third Party Offer.”
  • Section B.3(a)(i): “In the event that TBS Matches a Third Party Offer that includes Cable Rights… then TBS shall have the exclusive right and obligation to exercise the Cable Rights provided for (and on the same terms set forth) in the Third Party Offer.”

The Key Disagreement:

• • TNT says it properly matched by agreeing to pay the same billions in rights fees to distribute the same games in the same windows as Amazon proposed. Where or how they’re shown is irrelevant.
  • The NBA argues TNT didn’t match every last term and condition, like Amazon’s exact distribution plan and platform. Can’t swap in TNT’s own “equivalent” methods.
  • TNT will say the contract gives them broad matching rights for any Third Party Offer that includes their current package of games, regardless of the fine print.
  • The NBA claims TNT is trying to rewrite the Amazon proposal to give themselves rights and platforms not offered to Amazon. Match is not valid.
  • Ultimately the court must interpret if the contract requires a 1:1 match of all terms, or if matching just the material financial terms and rights is sufficient.

Key Takeaways:

• • The devil is in the details when it comes to these complex matching rights provisions. Small wording choices matter.
  • TNT sees the core “match” as the money, years, and game inventory. The NBA focuses on Amazon’s specific distribution plans.
  • Expect a fierce battle of contract interpretation. Both sides think the plain language supports them. Court may have to break the tie.
  • The NBA likely crafted Amazon’s offer document very carefully, anticipating this exact fight. The precision of the terms will be key evidence.
  • This dispute could set a new precedent for what “matching” a tech giant’s bid really means as digital players get more aggressive for top sports rights.

Elements of Breach of Contract:

• • 1) Existence of a valid contract (here, the 2014 NBA-TNT licensing agreement).
  • 2) Performance by the plaintiff (TNT alleges it fully performed its obligations and properly exercised its matching rights).
  • 3) The defendant’s breach (TNT claims the NBA breached by not accepting TNT’s valid match and honoring TNT’s rights).
  • 4) Resulting damages to plaintiff (TNT says it will suffer irreparable harm and monetary losses if not granted the NBA rights it matched).

The Circumvention Claim:

• • Section D.2. of the Matching Rights Exhibit: “Each party shall exercise its rights and perform its obligations under this Exhibit in good faith and neither party shall take any action with respect to a Third Party Offer the primary purpose of which is to circumvent the terms of this Exhibit.”
  • TNT alleges the NBA violated this by not sharing the Amazon offer until after its Board of Governors already approved it.
  • TNT also claims the NBA strategically delayed sending the offer to TNT to craft provisions intended to prevent TNT from matching.
  • According to TNT, the NBA purposely included terms it knew TNT couldn’t or wouldn’t match, but that didn’t reflect Amazon’s core offer.
  • If proven, this type of bad faith maneuvering to block TNT’s valid match could support a circumvention claim on top of the general breach of contract.

Key Takeaways:

• • TNT is pursuing multiple legal avenues to try to enforce what it believes is a valid match and its right to the NBA games at issue.
  • The court will have to determine if TNT proved the core elements of a breach of contract and complied with the matching procedures.
  • Look for TNT to emphasize the unfairness of how the NBA handled the bidding and matching process, not just argue the strict contract terms.
  • TNT’s request for a permanent injunction shows the unique and irreplaceable value of NBA rights. Money damages not an adequate remedy.
  • This case is a stark example of the risks and challenges for leagues trying to balance incumbent relationships with new tech players and evolving distribution models.

Inside the NBA’s Playbook:

• • Expect the NBA to argue “terms and conditions” means all terms, not just the big ones. It will try to distinguish TNT’s linear TV distribution from Amazon’s tech.
  • The NBA likely anticipated this exact dispute, so it was very strategic and precise in how it worded the Amazon offer. That language will be Exhibit A.
  • To rebut the circumvention claim, the NBA will downplay the significance of when it shared the Amazon offer with TNT and focus on TNT still having the chance to match.
  • The league will frame any unique provisions as legitimate business points it negotiated with Amazon, not deliberately punitive or impossible terms.
  • Ultimately, the NBA wants the court to focus on the strict language of the contract, where it feels it has the upper hand, not broader fairness or relationship arguments.

Possible Outcomes & Impacts:

• • If TNT prevails, it keeps its NBA rights through 2036 and likely strengthens its hand in future sports rights negotiations with the league.
  • An NBA victory could pave the way for tech giants like Amazon to accelerate their push into legacy media strongholds like live sports.
  • The court’s ruling on how strictly matching clauses must be interpreted could affect media deals across the sports and entertainment industry.
  • If TNT loses, it will suffer a major blow to its sports portfolio, linear ratings, and leverage with distributors. Will make it harder to justify high carriage fees.
  • An Amazon win would give it a prized property to attract and retain subscribers, as well as more clout in future sports rights showdowns with legacy broadcasters.

Key Takeaways:

• • The NBA will argue TNT doesn’t have the unilateral right to substitute its own distribution methods while keeping the rest of Amazon’s terms.
  • This dispute hinges on how broadly or narrowly the court interprets the contractual matching rights. The specific contract language is critical.
  • The NBA will paint the unique aspects of Amazon’s offer as intentional, desired terms, not artificial poison pills to thwart TNT.
  • A TNT win means the old guard maintains its grip on top NBA rights. An Amazon victory accelerates the tech invasion into sports media.
  • This battle will help set the rules of engagement and balance of power between legacy media and digital players as sports rights are redefined for the streaming era.

The Bigger Picture:

• • Live sports are the last bastion of appointment viewing and the lifeblood of the cable TV bundle. Whichever side prevails here will have the upper hand in future negotiations across all sports.
  • If streaming wins the day, it will put even more pressure on the economics of traditional pay TV. More power shifts to direct-to-consumer platforms. TNT has a lot on the line.
  • The sports rights battles of the 2020s will determine not just where fans watch games, but which companies wield the most power and influence over the entire industry.
  • Even if Amazon “loses” this particular deal, the fact that it pushed TNT all the way to the brink shows how vulnerable legacy broadcasters are. They were forced to pay up.
  • There’s a real risk the tech giants will just keep inflating rights fees to unsustainable levels until they drive the old guard out. Pure tech platforms don’t depend on sports for profits the same way.

Looking Ahead:

• • The next major sports rights deal to watch is the NFL’s Sunday Ticket package. Will Apple, Amazon or Google prevail over DirecTV? How will the NFL structure the deal terms?
  • NBA Commissioner Adam Silver has hinted at launching an in-house streaming service to cut out middlemen. That could be the next frontier as leagues seek more direct control.
  • Can TNT find other major sports properties to acquire if it loses NBA? Could WBD make a play for the NFL, or will it get priced out by tech money there too?
  • Look for the NBA and other leagues to write future contracts even more carefully after seeing the matching rights fight play out here. The devil is in the details.
  • If streaming wins definitively, will the focus just shift to tech giants battling each other as deep-pocketed streamers like Apple and Google join the fray? Will leagues just keep playing them off each other?

Key Takeaways:

• • The court’s ruling on the nuances of sports media contract clauses will have far-reaching ripple effects on future rights deals.
  • If streaming giants gain more footing with top tier rights, it will further disrupt the traditional sports media power structure. The old rules no longer apply.
  • Leagues will watch closely to see who has the advantage in renewal negotiations – long-term incumbent partners or aggressive new tech bidders.
  • The TNT-NBA dispute is a microcosm of the larger battle between legacy media fighting to protect its turf and tech upstarts looking to own the future.
  • No matter which side prevails here, it’s clear live sports rights are the battleground where the streaming wars will be won and lost in the years ahead.

The Verdict: Cast your vote for the likely outcome of this landmark sports media lawsuit. Will the court rule for TNT or the NBA?

• • A) TNT: The court finds TNT properly matched Amazon’s offer per the contract and orders the NBA to honor the deal with TNT.
  • B) NBA: The court rules TNT did not satisfy the matching terms and the league was free to sign with Amazon.
  • C) Settlement: TNT and the NBA reach an out-of-court compromise to resolve the dispute and launch a new joint venture.
  • D) Split Package: The court allows TNT to keep certain marquee games while Amazon still gets rights to most of the package.
  • E) To Be Continued: The case drags out for years on appeal with no definitive winner as the sports world moves on.

Disclaimer

The foregoing article discussing the legal dispute between TNT/WBD and the NBA is informational, not legal advice, and based on publicly available information from news reports and court filings.

The matters addressed involve developing facts and legal issues that are subject to change as the lawsuit evolves. The viewpoints expressed represent informed commentary, not definitive conclusions of fact or law.

Readers should not rely on the article’s contents when making decisions regarding their own legal rights or business affairs. For guidance on how this dispute may impact specific circumstances, please consult a licensed attorney with knowledge of the relevant law, contracts and proceedings at issue.