In a recent development, Warner Bros. Discovery has taken legal action against the National Basketball Association (NBA) to protect its broadcast rights for a package of live games. The company's TNT Sports unit has filed a lawsuit after the NBA rejected their claim of matching rights for a streaming-only package of games earmarked for Amazon Prime Video.

According to a statement released by Warner Bros. Discovery, the rejection of their third-party offer matching was unwarranted, and they believe it is in the best interest of NBA fans to maintain the broadcast rights through their widely distributed video-first distribution platforms, including TNT and Max. The media company seeks to prevent the NBA from awarding the rights to Amazon, or alternatively, seeks monetary damages.

The NBA, on the other hand, stated on Wednesday that they had reached agreements with Disney, NBCUniversal, and Amazon for different packages of games, thereby concluding their longstanding relationship with Warner Bros. Discovery's Turner Sports. This 11-year media rights deal is valued at approximately $77 billion, a substantial increase from the previous agreement.

Warner Bros. Discovery's decision to match the Amazon package, instead of the NBCUniversal agreement, led the NBA to claim that the matching rights were invalid. The media company argues that their matching rights should still apply to the Amazon package since many of the games in that package were previously aired on cable TV.

The legal dispute centers around the contractual language of the 2014 matching rights agreement between Warner Bros. Discovery and the NBA. In a court filing, Warner Bros. Discovery referred to specific provisions stating that if a third party offer includes cable rights and no other incumbent matches, then Turner Sports (TBS) has the exclusive right and obligation to exercise those cable rights. The company alleges that the NBA breached the agreement by refusing to honor their match for the Amazon package.

The significance of the NBA rights to Warner Bros. Discovery's cable TV business is highlighted in the lawsuit. The company states that NBA games generate substantial viewership and ratings, which directly impact advertising revenue and negotiations with downstream distributors. Furthermore, owning NBA rights gives Turner Sports a competitive edge in negotiating with other leagues for sports rights.

Warner Bros. Discovery's CEO, David Zaslav, had previously mentioned that the company did not have to have the NBA if the economics didn't make sense. However, this lawsuit underscores the value of the NBA for the company's cable TV business, which has faced challenges due to the rise of streaming services.

The lawsuit seeks preliminary and permanent injunctive relief to prevent the NBA from licensing the rights to Amazon, while also indicating a potential claim for monetary damages if equitable relief is not granted.

It remains to be seen how this legal battle between Warner Bros. Discovery and the NBA will unfold and what implications it will have for the future distribution of NBA games.