Warner Bros. Discovery settles legal dispute with NBA, stock jumps

Investing.comNov 18, 2024 3:26 PM

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Investing.com -- Warner Bros. Discovery (NASDAQ:WBD) shares jumped Monday after the mass media conglomerate agreed to end its pursuit of broadcasting live NBA games in the US starting with the 2025-26 season, resolving all legal disputes with the league.

The media company had filed a lawsuit against the NBA in July, alleging the league had not allowed it to exercise its matching rights on a package of live games.

The NBA, instead, chose Disney (NYSE:DIS), Comcast’s NBCUniversal, and Amazon (NASDAQ:AMZN) Prime Video as its US media partners for an 11-year deal beginning next season. The agreement, which also includes WNBA games, is valued at approximately $77 billion, according to previous reports by CNBC.

The settlement, announced Monday, along with a separate agreement between Warner Bros. Discovery and ESPN, ensures Warner Bros. Discovery remains involved with some NBA content through production collaborations and licensing agreements. However, it formally ends Turner Sports’ 40-year role as a US broadcaster of live NBA games after this season.

Under the terms of the deal, Warner Bros. Discovery’s TNT Sports will retain access to NBA highlights for use on its Bleacher Report news platform and its social media channel, House of Highlights, for the next 11 years.

“Together these agreements ensure fans will continue to enjoy TNT’s Inside the NBA and create tremendous value for our entire portfolio as we accelerate the growth of TNT Sports, Bleacher Report, House of Highlights and our global sports business,” said David Zaslav, CEO of Warner Bros. Discovery.

The agreement also grants Warner Bros. Discovery the right to license and distribute NBA content across its platforms and includes live game rights in the Nordic countries, Poland, and Latin America, excluding Brazil and Mexico.

Moreover, the settlement extends a partnership between NBA Digital and TNT Sports for five more seasons, enabling the NBA to collaborate with Warner Bros. Discovery on “promotion and a variety of services, including production, content development and sales operations services,” according to a statement.

While the league won’t pay Warner Bros. Discovery additional fees beyond the settlement’s terms, the agreement secures the company a steady revenue stream from its collaboration with the NBA.

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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