Key Lawsuit Details

• Plaintiff: Richard Collura
• Defendants:
  • Warner Bros. Discovery
  • CEO David Zaslav
  • CFO Gunnar Wiedenfels
• Targeted Period: February 23 to August 7, 2024
• Lawsuit Status: Seeking class-action certification

Financial Impact and Allegations

Stock Performance

• WBD stock declined 11% during the specified period
• Stock dropped from $7.71 to below $7
• Has since recovered, trading above $10

Write-Down and Losses

• $9.1 billion write-down of cable network values
• Additional $2.1 billion in merger-related costs
• Total balance sheet losses of $11.2 billion in Q2

NBA Rights Negotiation Timeline

Negotiation Highlights

• Current NBA rights contract paying $1.2 billion annually
• Exclusive negotiating window expired in April 2024
• NBA secured new 11-year, $77 billion media rights deal with:
  • ESPN (A package): $2.6 billion annually
  • NBCUniversal (B package): $2.45 billion annually
  • Amazon (C package): $1.8 billion annually

Legal Claims

Investor Allegations

• Executives made materially false statements
• Failed to disclose known risks of losing NBA rights
• Overstated company’s business prospects
• Concealed potential significant business impacts

Specific Accusations

• Zaslav claimed WBD was “on solid footing with clear pathway to growth”
• Wiedenfels emphasized their “very, very strong partnership” with NBA
• Lawsuit argues these statements were deliberately misleading

Aftermath and Settlement

NBA Rights Settlement

• WBD sued NBA for breach of contract
• Settlement reached on November 18
• Secured rights to:
  • NBA highlights in U.S.
  • Live game coverage in European/Latin American markets
  • Licensing “Inside the NBA” to ESPN

Legal Representation

• Pomerantz
• Rosen
• Bernstein Liebhard LLP
• Gainey McKenna & Egleston