Don’t hate the player, hate the game…

Warner Bros. Discovery is making more headlines this week than when Dennis Rodman wore a wedding dress back in 1996 as they’re suing the NBA for awarding their media rights to none other than Amazon. 

(Source: CNBC) 

That’s right, Amazon swooped in, dunked on Warner Bros. and now in typical sore loser fashion, Warner Bros. is lawyering up. The reason? Well because the NBA is shaking up the way things have been done for decades. 

(Source: Giphy) 

You see, Warner Bros. Discovery has been showing NBA games for nearly fourty years (which is longer than any of Lebron’s hairlines have lasted). But now, the NBA is pulling a fast one, and tossing the ball to Amazon. 

(Source: Imgflip) 

However, even though all is “fair” when it comes to money and basketball, Warner Bros. ain’t having it. Their argument is that their 2014 deal with the NBA gives them matching rights to any third-party offer to keep broadcasting NBA games. They tried to match Amazon’s $1.8 billion per year offer, but the NBA snubbed it off giving the role to Amazon Media instead. 

(Source: CNBC) 

On the other hand, the NBA argues that Warner Bros.’ rights don’t extend to an all-streaming package like Amazon Prime Video. Warner Bros. Discovery’s response? “That’s a load of crap.” They argue that their offer to air games on TNT and simulcast on their streaming service, Max, should count. 

(Source: Giphy) 

Now of course, while all of this sounds like two dads at a little league game going at it, this is a huge blow to Warner Bros. We aren’t talking about some measly game broadcasts, we're talking about an 11-year media rights deal worth roughly $77 billion. Which, according to Warner Bros, is crucial for their business as the rights drive immense viewership that results in a boat load of ad revenue. 

(Source: Yahoo Tech) 

What’s kind of comical about this is that David Zaslav, CEO of Warner Bros. Discovery, once said, “With sport, we’re a renter. That’s not as good of a business.” But now it looks like they’re pretty keen on keeping this “rental” around. So it’s kind of like a “you don’t know what you have until it’s gone” scenario, and Warner Bros. is finding out just how vital being a “renter” to the NBA is to their business. 

(Source: Giphy) 

Meanwhile, Amazon is flexing its muscles, as this is just another link in their growing armor. 

They’ve already made waves with the NFL's Thursday Night Football, and now they’re eyeing the NBA. 

(Source: Sports Pro Media) 

And with over 200 million Prime Video subscribers globally, it’s easy to see why Amazon was awarded the rights. They have a massive audience that’s hard to ignore, and given that the NBA’s Adam Silver stated that Amazon’s global reach aligns perfectly with the league’s ambitions, Warner Bros. better have some pretty savvy Harvey Specter lawyers on their payroll. 

(Source: Giphy) 

So, what happens now other than Warner Bros. sweating harder than Shaq at a free throw line? Well Warner Bros. Discovery is digging in for a legal battle, and if they win, it could mean big changes for the NBA’s media landscape. If they lose, well, let's just say their sports division might start looking like the Washington Generals' win column as Amazon continues its march towards media domination. 

(Source: Imgur) 

As of Friday’s close Warner Bros. (NASDAQ:WBD), was up +4.13% as some of the news of a suit started sweeping its way to investors. So it seems like some optimism of winning the legal battle is there, especially as the stock is sitting nice up +11.69% on the month. 

For Amazon, the stock closed up +1.47% on the day while still being down - 1.35% on the week, but keep in mind, in the grand scheme of things, this situation is just a cherry on top for Amazon. We all know Amazon’s tentacles span from everything to ecommerce, cloud services, stream, and God knows what else… So regardless of the results of the lawsuit, Amazon is still winning.

(Source: Tarnow) 

The only real stress is being felt on Warner Bros. side considering this is one of their main money makers outside of their motion pictures arm. But still, only time will tell how the news of this suit will impact prices as trading resumes tomorrow morning. 

In the end, while this may mean we’ll need more subscriptions than a hypochondriac at a medical journal convention just to watch a dang NBA game, investors should stay aware. 

(Source: Giphy) 

This is a billion dollar soap opera we’re witnessing, and the last thing you want to do is get caught in the crossfire. So keep an eye out for both of these stocks next week. In fact, just for kicks in giggles, I may just start a friendly betting pool on who's gonna come out on top with some of my friends. 

Spoiler: My money’s on the lawyers - they always win. 

(Source: Giphy) 

Enjoy your Sunday everyone! 

Stocks.News holds positions in Amazon as mentioned in the article.