NBA Media Deal ‘Match’ by WBD Alters Credit Rating Penalties

The NBA filed a comprehensive memo Friday night that urged New York Judge Joel M. Cohen to dismiss the breach of contract lawsuit brought by Warner Bros. Discovery and TBS. The main argument is that the plaintiffs didn’t match Amazon’s offer but instead proposed a new offer.

To advance that claim, the NBA cited a laundry list of instances where TBS changed the terms of Amazon’s offer. One of the most significant changes is how the TBS offer defines a “triggering event,” which refers to a condition where the NBA could terminate the agreement within 10 days of such an occurrence.

More from Sportico.com

Amazon’s offer defines a triggering event as one that includes its long-term unsecured credit being not rated by both Moody’s and S&P for at least 90 days. Another triggering event is if either Moody’s or S&P no long offers an “acceptable rating.”

TBS proposed an alteration to the latter definition to say “both Moody’s and S&P” have below an acceptable rating, instead of either one. This definition is obviously more favorable to TBS; the NBA sees it as evidence that TBS didn’t actually match Amazon’s offer. TBS did not immediately respond to Sportico‘s request for comment.

“We maintain our position that the NBA’s actions are unjustified, and we strongly believe we have fulfilled our contractual right to match the third-party offer,” a TNT Sports spokesperson said in a statement given Friday. “Not only is it our contractual right, but it is in the best interest of the fans who want to continue to enjoy our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed platforms including TNT and Max. We will file our opposition in the coming weeks.”

The contract language tweak is particularly relevant because Warner Bros. Discovery was just put on watch by S&P Global for a possible credit rating downgrade over the weakness of its linear TV business. The ratings agency affirmed its BBB credit rating but revised its outlook from stable to negative.

“The negative outlook reflects our expectations that WBD’s leverage will remain elevated…

Source link : https://finance.yahoo.com/news/nba-media-deal-match-wbd-120000402.html

Author : Sportico

Publish date : 2024-08-27 12:00:00

Copyright for syndicated content belongs to the linked Source.