(Reuters) -Warner Bros Discovery will sue the National Basketball Association in New York after the league rejected its matching bid for TV broadcasting rights, a source familiar with the matter said on Thursday.
The NBA on Wednesday rejected an offer from Warner’s TNT sports division — ending four decades of partnership — and announced new agreements with Walt Disney’s ESPN, Comcast-owned NBCUniversal and Amazon.com in an 11-year deal worth $77 billion.
Warner Bros Discovery and the NBA did not immediately respond to Reuters requests for comment.
Shares of Warner Bros Discovery fell more than 7% in early trading, as Macquarie Equity Research downgraded the stock to neutral due to the loss of NBA rights.
“NBA rights were important in our view to the future success of the Max streaming service,” said its analysts, adding that the loss may hasten the downturn in linear networks too.
Some analysts had said suing the NBA could hurt the company’s competitiveness in the long run as other leagues could become hesitant to strike deals with them.
CNBC reported earlier that Warner has sued the NBA.
(Reporting by Harshita Mary Varghese and Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar and Arun Koyyur)
