WBD Sued By Investors Over Loss Of NBA Rights
Warner Bros. Discovery has been sued by investors who claim they mischaracterized the impact that losing rights to regular and postseason games for its TNT network would have on its business.
In August, a month after the NBA officially rejected WBD’s offer to match the rights package that it cut with Amazon, the company took a $9.1 billion goodwill impairment charge related to the depreciation of its TV networks, which accounts for its failure to renew its deal with the league.
The lawsuit takes issue with WBD’s failure to disclose that the loss of NBA rights were likely to cause the company to significantly reevaluate its business, reflected in the massive impairment charge.
“Plainly, the foregoing risk warning was a generic, catch-all provision that was not tailored to WBD’s actual known risks regarding its sports rights negotiations with the NBA,” states the lawsuit.
In July, WBD sued the NBA in New York state court after the league refused to accept the company’s matching offer for one of the packages in its new 11-year media rights deal that has been subsequently settled.