Warner Bros. Discovery and CEO David Zaslav were sued Monday by investors who experienced “significant losses and damages” caused by fallout from the studio’s rights negotiations with the National Basketball Association.
The media giant lost the rights to NBA games in July: The new deal with ESPN, NBCUniversal and Prime Video will start with the 2025–2026 season. In June, the Wall Street Journal valued the multi-studio deal at $76 billion.
The suit filed Monday is on behalf of all shareholders who acquired WBD securities between Feb. 23 and Aug. 7. WBD chief financial officer Gunnar Wiedenfels was also named as a defendant.
Richard Collura is behind the class action suit, filing in the District Southern Court of New York “individually and on behalf of all others similarly situated.” Law firms including Rosen, Bernstein Liebhard LLP and Gainey McKenna & Egleston have all issued calls urging impacted parties to partake in the suit.
According to legal documents obtained by TheWrap, WBD’s “wrongful acts and omissions” and the “precipitous decline in the market value of the Company’s securities” caused the plaintiffs to suffer financial losses.
Zaslav and Wiedenfels, referred to as “Individual Defendants” in the lawsuit, are accused of presenting “misleading” SEC filings, press releases, and other market communications for the company.
The suit further states that they deliberately concealed “adverse facts” that had not yet been disclosed and the the picture they painted was “materially false.”
A comment by Wiedenfels from 4Q 2023 earnings call is cited in which he mentioned WBD’s “very, very strong partnership for 40 years” with the NBA. He also said, “It’s very easy to lose control over sports rights investments. That’s not what we do. We’re going — we know exactly what value we assign and
we stay disciplined during our discussions.”
Collura is seeking a jury trial.
Pamela Chelin contributed to this report.
