The NBA is about to enter a new era in its already-storied existence, but we’re not talking about the quality of basketball being played on the hardwood.
The rights to broadcast the league’s games has been one of the more intriguing storylines that has the fans curious on how consuming professional basketball would change.
Everyone is preparing for the massive changes that will come with Adam Silver’s decision to move the most popular pro basketball league’s rights to Amazon. Warner Brothers, the company that originally had a huge stake in the league’s broadcasting rights, claimed that they would pursue legal action over the decision. However, nothing substantial has come of it yet.
A recent update revealed the one detail that won the NBA over to join the streaming giants, and it’s a pretty big revelation.
NBA reveals Warner Bros. Discovery attempted to alter Amazon’s ‘poison pill’ clause
The part of the Amazon offer that won Silver and the league over is known as the “poison pill” clause, where the Jeff Bezos-owned venture would place the first three years’ worth of payment for the league’s broadcasting rights in escrow.
The NBA claimed in a statement that while Warner Bros. Discovery tried to match the offer, they tried killing it off as well.
Per Awful Announcing’s Ben Axelrod:
“Amazon agreed to maintain three years of rights fees in an escrow account for the NBA’s benefit,” the response reads, confirming the clause. “When a rights payment becomes due under the agreement, [the contract] ensures that the NBA will automatically receive the full payment from the escrow account on the day it is due, and Amazon then is required to replenish the account within five business days of each payment withdrawal.
“In its purported match, TBS turned this entire structure on its head, eliminating the requirement to deposit rights fees into an escrow account and giving itself, not the NBA, the choice of replacing the escrow requirement with letters of credit… Further, instead of allowing the NBA to receive payment automatically from the escrow account as rights fees become due, TBS’s revisions would only allow the NBA to draw down on the letters of credit—which, under TBS’s revisions, ‘may be syndicated letters of credit,’ thus requiring the NBA to collect from multiple banks—if rights fees ‘are not timely paid.’”
There’s a whole lot of legalese involved, but the language used clearly indicates that the league is no longer interested in returning to TNT in any shape or form.
While it’s very likely that the dispute will be settled out of court, this revelation marks the strenuous relationship between the league and its long-time broadcasting partners.
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