Warner's TNT Sues NBA Over TV Rights

expected to triple the league's broadcast income. Charles Barkley, who's been an analyst on TNT for twenty four years, was outspoken about the deal.

the as the kids would say, old school broadcasting. You've got a company P and T here who has had the right as a licensee for forty years within their agreement, which again a lot of redactions. Hard to know the specifics and the definition of the word match right a commonly used I don't want to say trope, but a commonly used part of entertainment agreement where somebody who has rights to something would like to keep those rights to something, but they allow a third party to come in make

the offer and it get the match. That's a discussion we have to have. What is the match right, how is it defined? And then you know you've got a usurper if you will tech company, Amazon, obviously Disney that comes in and says, I want to make a really great offer to you. I'd like to bring this asset, which is called an asset by T and T in

their complaints. I want to bring this asset to our camp, and we think we can do a great job with this and the billions of dollars every year, we think we can enhance them, do really well with and enhance the NBA income and enhance ours obviously, bring bigger and better advertising dollars to their format and in subscriptions. And we'd like to take an offer on this somewhere. They made that offer right. The timing was correct. They made the offer, and T and T had two quote match.

So T and T says we matched, we matched timely. That's not in dispute. Seems to be all done correctly. But Amazon is saying, and apparently NBA is saying, no, you didn't. You didn't match. According to the agreement, we have other services or other things we can offer. You didn't match that you're only matching the initial offer, and that definition of match is one of the crucial discussions with billions of dollars at stake.

because it's contractual language is underdacted from the complaint. But there's a real difference here, and that is the difference would be between I get to match and the words that are using complaint as an incumbent, which is not a commonly used word in entertainment property agreement incumbenty, and that it says as an incumbent, TBS has the right to match any quote third party offer end quote for future NBA telecast rights, right to match any third party offer,

which would indicate to me that it's an initial match right. If someone says two hundred and I say I'll give you two hundred, I'll match that. Now it stays with me. I am, as they call it, the legacy or incumbent here, I'm the legacy licenseee. I would maintain my rights. And the term length of the next portion of this agreement

is eleven years. That would be over fifty years of retaining rights in terms of a licensee to a piece of property like this, And that's probably where everybody is fighting this because the tech companies think, if I do a better job, So the word match looks like initial match. Many times when negotiating entertainment property agreements like this. Music business is a good example, music published record deals or things of this nature. Licensing deals, we have last match.

That's a preference of mine because if you say two hundred, but that's not the fully ending negotiated deal, I think I can get you to three. I don't want you to match two. I want you to match the deal I'm willing to execute. That would be what the match right should say. I don't know because it's been redacted, so we'll have to find out as Discovery goes.

I think that they're trying to say you're an old school broadcaster, but TNT has other platforms that they get to put it onto. MAC So I think these are parallel universes colliding. I don't know if they're exactly in the same size universe, but I think that they are structurally similar because MAX allows the similar version of platform structure as Amazon would have as well.

P and T and the NBA this forty year. That's a lengthy relationship which apparently, according to whatever I've seen in the press and people that I know, has not been the best in the few years that there's been a lot of discussion about this, you know, and again I'm going to reiterate that point about tech giants versus old school broadcasters. There seems to have been a exclusive negotiation period that was the precursor to this match. So

it looked like there was some over the last year. Contractually, they were obligated to have not mediation, but a negotiation where they would sit in that room and they would try to knock out their new agreement. And it didn't work. Somewhere in the NBA to keep the people in the NBA or the owners whoever was involved, said no, it's not structurally sufficient. We think we can do better. We think the NBA brand can do better at this different

set of platforms. But they had that moment and it didn't work out well.

that there it is. I don't think it's hard to get in front of a jury. It's not difficult areas of law. It's going to be how do you define match? And did we do it? And if we did it, I'm going to show the jury here here, these two pluckers right up here, right here's ours. There's there getting to that though, Oh my goodness, we have a long way to go. We have all this other stuff we're going to have to go through.

I think they've won their own Emmys separately, whatever those shows are, you know, I know shows now start before the game, during the game, after the game, next week's game, and.

losses will suffer. Well, I have a hard time. I mean, that's forty years. Did you do everything in the forty years? I think that's going to come up, right. They're going to say they got complacent. Sure, they had these great team of experts, these really popular posts, and you know, superstar guys and gals. You know, it's interesting to see that in the complaint. I want to say, it's a woe is me kind of thing, saying how terribly we'll be hurt. Sure, that's what complaints say, but that's not

the point here. Did you match it? Did you follow what they had said? I also want to know what went for all in that exclusive negotiation period, What happened there, and ultimately, if I can be the prognosticator for a second, you know, if it doesn't work out, there may be a split. The baby here it is State Court is State Supreme in New York, So this won't be the

first time anybody does something like this. They may say, you know what, for the first three years, we may give key games to stay with T and T and their team, and then regular season games X, Y, and Z will go over here, and then eventually we're going to morph this all entirely over to the new licensee. That may be how this gets done. Nobody, particularly the

NBA and TNT. Nobody's going to want to have this extend past even the preseason, so I think they're going to have to figure out methodologies to compromise at some point. It's not like they're going to postpone the season, So I think that the issue is going to start to come up pretty fast and furious. This is not just rocket docket as in the federal system. This is going to be oh boy, we got to move this along.

There's billions and billions to stake here, and this is one of the most valuable properties and entertainment biz in the world, and we need to get this moving along.

on structure of money. There may be a way to know UO two records to this person, Oh you owe five songs to this publisher. Oh you owe twelve episodes the original production company. Yeah, we do that to get through the process. So we don't kill the golden goose here. Enter Human properties take decades, if not lifetimes to develop like this, and so nobody wants to hurt that just when it's probably coming off an Olympic high right now.

So I think that they're going to be ways we get this resolved that may not be in the standard methodology. I think there's gonna be a lot of meetings and chambers. I think there's gonna be a lot of meetings with everybody just discussing how to make this work. But it's can be a fascinating couple of months.

Somebody says, we did it the other side, NBA, No you didn't do that. No it didn't. Is it based upon as you and I just discussed, the variable platforms and the extensive nature of the other digital platform It's hard to know. The redactions make it hard to know because at the end of the complaint June. There is a series of redactions where it's effectively saying the Amazon offer they figured a way around it. And that's the kind of language you see in the complaint. They found

a way around it here. They did something here that wasn't in good faith. It's a bad faith effort to deprive TBS of its contractual right. That's pretty hefty redacted in the complaint. We don't know what the language was, but they're saying they caused the match to be rejected. Has to be proof of that. What did they do? Where is that here? You know where? If that's the enter? What did they do?

not a part of the record. But I started out by saying, I'm going to stay with it. This is the invasion of the tech companies, and they're coming for the old school broadcasters, and they think that they could grab up these multi billion dollar properties and do something new with them and gives them a lot of cloud.

We're not just delivering pactors anymore. Right, We've got entertainment properties and we're going to have a long term, eleven year deal on one of the most important entertainment sports properties in the world.

Court's term. This is Bloomberg. Last term, the Supreme Court changed the landscape for federal agencies when it threw out a forty year old precedent known as Chevron deference, which required that courts deferred to reasonable agency interpretations of ambiguous laws. The effects can already be seen in federal court rulings

since that June decision called loeper Bright. According to a Bloomberg Law review of rulings on agency actions, in the month after that decision, federal judges ruled against agency interpretations in thirteen out of twenty decisions, including orders that blocked rules prohibiting discrimination against transgender people in health care and education,

and that blocked rules banning worker non compete agreements. And in all those cases save one, the federal judges reviewing the agency actions had not even used a milder form of defferences to the government an eighty year old president called Skidmore deference, which the Supreme Court said could be used. Joining me is an administrative law expert. Carrie Coliniese, a professor at the University of Pennsylvania Law School. Will you explain what Skidmore deference is?

follow what the agency says. The idea being that Congress has delegated, even implicitly, the authority to the agency to determine what ambiguous that she means, and courts must follow it. Get more difference now goes back to a decision forty years prior to Chevron. Chevron was decided in nineteen eighty four. It's now just been overturned in twenty twenty four, forty

years later. But if you go without sort of forty years before kind of symmetry, here, we can see a Supreme Court's decision called Skidmore that articulated a type of deference that's similar when that she's are ambiguous, but it's not mandatory that courts follow what the agencies have decided. Get more difference is known as difference that follows from

agency's power to persuade. If the court reviewing an agency's interpretation finds that, on the basis of the agency's expertise and the thoroughness of its investigations, that well, the agency he's probably right, then it can go ahead and defer to the agency, but it's not obligated to do so.

And that's the real difference here. What the Court did this year in Low for Bright was to return us back to a world eighty years ago, which was the world dominated by skidmore difference, where courts could follow what the agency said if they had the power to persuade the court that they were right. I don't know. If your audience is highly technical and filled with a lot of lawyers, I could actually give another analogy that I

think claims did more difference well for lawyers. Okay, if we go back to a world back in the common law, where courts were deciding all sorts of questions, courts had to follow precedents of prior court decisions, and the Pennsylvania Supreme Court, let's say, needed to follow prior decisions of the Pennsylvania Supreme Court unless or until they overruled themselves. Binding precedent followed when you were in the same state with the same court. However, it was always the case,

and it still is always the case. Say a Pennsylvania Supreme Court could look to the decisions of the Ohio Supreme Court or the Florida Supreme Court in deciding very similar cases, and they weren't obligated to follow what the Ohio or the Florida courts decided, but they might be persuaded by what the courts in Ohio and Florida decided. And that's the way to think about Gidmore deference is not mandatory to follow it, but it is an option if a court is persuaded.

of respectful consideration for their views. So a court should certainly hear agencies out, and if they are persuaded, then sure they follow them. You know, some people would say it's not really a difference at all. It's what's always there for any litigant. If you persuade the josh that you have the best interpret the judge will agree with you. And so it may not really give agencies a whole

lot of weight behind what they do. But you know, the reality, of course, is that a lot of these cases arise under statutes and with issues that are very technical, and judges did before Chevron side with agencies, you know, more often than not, and one might might expect the same to happen afterwards, except we have, you know, a

different composition to the judiciary today. And I think the Supreme Court's decision to overrule the Chevron is sending a signal throughout the lower courts that you should be skeptical, notwithstanding these passing references to skid More and the possibility that it still might apply. It's very clear. I think the message from the Supreme Court is be very skeptical

of agency power. And that's not only in the overruling of Chevron, but it's in the Court's recent invocation of the Major Questions doctrine and in some other cases as well.

really shaken the things up here. After forty years of court citing Chevron, citing Chevron, citing Chevron, it was one of the most widely cited administrative law decisions, really one of the more widely cited of any Supreme Court decisions of all time. Now the Court says away from that,

don't cite it. And so it's also I think has around it kind of a penumber that is apparently telling lower court judges be skeptical of deference of any kind, because again, your job as judges is not to defer to anyone, but to make the best reading of the

statue yourself. And yes, you can listen to the agency, give the agency respectful consideration, but you know that doesn't leave much room for a notion of deference if it's the courts that are supposed to be decided this difference of any kind, even a voluntary deference even though the lower bright opinion as you can rely on if you're

persuaded by the agency. But if you're a lower court judge and you're going to agree with the agency, then just lay out the argument for why the best reading of the statute is the same one that the agency has made no need to cite. Get more. Just lay it.

an injunction bid. So does it seem as if the more conservative judges are the ones that are anti agency and are going to rule against agencies if they can, whereas the more liberal judges will rule four agencies.

of the statutes. There's you know, empirical evidence that indicates that, and we might expect that judges that are skeptical of agency power are hearing this signal that the Supreme Court is sending in lower Bright much more loudly and strongly than our other judges. Perhaps now may be the case, of course, that there will be judges that are willing to side with the agency too, and they're going to

say the best reading is the agency's interpretation. In some sense, we're going to have some dueling opinions I suspect in various different courts around the country, ultimately perhaps having more of these conflicts or what we call circuits splits that the Supreme Court will have to resolve, and it's going to go up to a majority of the Supreme Court that I think has demonstrated itself to be extremely skeptical of agency authority.

watched cases of the last term. The Supreme Court's conservative majority set forth a new standard calling on judges to use their independent judgment to decide whether an agency acts within the authority that Congress granted it, and a little over a month after that decision, the effects can already be seen in federal court rulings. District court decisions on request to freeze Biden administration regulations showed a partisan pattern.

According to a Bloomberg Law review of rulings on agency actions, seven of the eight rulings that paused rules were issued by Republican appointed judges, while a Democratic appointee handed down the one rule rejecting an injunction bid. I've been talking to administrative law expert Carrie Coloniesi, a professor at the

University of Pennsylvania Law School. This may be a little extreme, but do you think we'll get to the point where agencies will throw up their hands and say, why go through the rule making process when we're just going to be overruled by the courts.

more legislation. And he actually found that, you know, there's actually less legislation in states that didn't have something like

the Chevron doctrine at the state level. And he surmises that, you know, it might be the same thing that you're suggesting that my bother with legislation if at the end of the day, courts are going to get to decide what it is and it's going to be fixed because when courts decide what a statute means that's in precedent, and there's not a lot of flexibility, so you know, even legislations might well kind of say, well, why bother, and not only agencies.

in court and their actions are being challenged. That statute says that all relevant decisions are to be decided by courts, All relevant legal determinations are supposed to be decided by courts, and Loper Bright really hinged itself in its reasoning on an inconsistency it saw between the Chevron doctrine of deference and the Administrative Procedure Acts that leaves. So maybe this

isn't so dismal. If there is a Congress that wants to amend the Administrative Procedure Act, it's possible for them to reverse what the Court has done here in Loper Bright.

So we'll have to see I mean, I think what the future holds is going to be dependent upon a very complex set of interactions between judges at a lower court level, different persuasions between what the Supreme Court does in future cases, what agencies do, and what Congress ultimately do in what might be called, you know, the administrative governance game. That's going to be playing out for some years to come, and we'll have to see how it plays out.

you know, they're the government. They you know, we're the government too, in some sense, maybe on the same side, and you know, as long as the government's been pretty reasonable and Congress intended the agency to decide we should we should follow that. That was the underlying basis of Chevron and Justice roberts Is, I think recognized the reality

that those factors will still be there. The question, though, is the judiciary has changed, and it's not so clear that there are as many judges that are as inclined to say that we're on the same team as the agencies.

There are judges, I think out on the federal judiciary today that the administrative agencies is part of a deep state, you know, a conspiracy of working against the public and hamstringing business unduly and so forth, being out of control and needing to be rained in and being very suspicious of them. And when you have judges that take that view, litigants know how to find them, and they will find them, and we will get rulings that have the agency on the losing side in the future.

The Court tried to address this in one paragraph of its opinion, but it's ambiguous and leaves a lot of questions. So these meta questions about what lower Bright means and how it will apply, and there's several of them, those

will be there. The second set of questions that are going to be there is to settle all of these more targeted statute specific questions that are going to arise, and to some extent, they always did arise when different circuits come to different meanings about what the same statute says.

And the Court may well have to be even busier than it is today in resolving what we would call circuit splits or where you know, different courts are coming to different best readings of the same statute and we'll have to see how that plays out too. But yes, there's no getting out of the fact that statutory interpretation is, you know, a fundamental part of what judges and lawyers are tasked with doing. It was so under Chevron, and the Supreme Court will continue to have to play a role.

There's no getting out of this. You know.

it's unleashed, you know, a mess if you will. You know, at the minimum, on abortion right, it's certainly not alleviated. The Supreme Courts need to decide cases like in the misipristone case or you know, heaven forbid, we're going to have compstack Act case for example, down the road. So abortion has not left the Supreme Court's agenda, and this whole idea of overturning Chevron and having a major questions doctrine all of it. Ultimately, though, there may be a

message to the mess. First of all, it's disruptive to government, and maybe that's part of their objective here. Another thing is empowering of the court. It's putting the court front and center in governing on some of the most controversial issues of our time in a way that you know, I don't think it's been occupying that role for at

least fifty years, probably even more. When you look across the whole sweep and certainly when you look at administrative law decisions, the courts have not played the kind of central role that now they will be playing. And you know, it raises a host of questions about whether the courts have the capacity to deal with these issues in a

smart and effective way. Are we going to have new technologies and new ways of doing business that needs some sound, sensible, good analytic decisions and will the courts be able to deliver that? You know, it's an open question.