A proposed class action lawsuit was filed Monday accusing Warner Bros Discovery of mischaracterizing the impact that losing NBA media rights would have on their business and bottom line.

Shareholder Richard Collura asked a New York federal court for class-action status on behalf of shareholders who purchased WBD stock between February 23 and August 7, 2024. That timing aligns with the media company’s announcement of a $9.1 billion impairment charge stemming from a reevaluation of their TV networks’ value as audiences and advertisers leave in droves for streaming services. The decision was also said to have been made in part because WBD lost NBA media rights following the 2024-2025 season.

Coupled with an additional $2.1 billion in costs related to the merger between WarnerMedia and Discovery, the company had $11.2 billion in losses on its balance sheet in the second quarter.

The lawsuit claims that the defendants, which include WBD’s CEO David Zaslav and CFO Gunnar Wiedenfels, “made materially false and misleading statements regarding the company’s business, operations, and prospects,” during the period specified and “failed to disclose that WBD’s sports rights negotiations with the NBA were causing, or were likely to cause, the company to significantly reevaluate its business and goodwill.”

The suit adds that the defendants “overstated WBD’s overall business and financial prospects,” pointing to a first-quarter earnings call when Zaslav told investors that WBD was “now on solid footing with a clear pathway to growth” and that the company is confident in its “ability to drive sustained operating momentum and enhanced shareholder value.”

“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” reads the lawsuit.

In July, the NBA finalized its agreements with Disney, NBC Universal, and Amazon Prime Video on a new broadcast rights package, ending their longtime relationship with WBD and TNT Sports. Or so it seemed. WBD sued the NBA with a matching rights lawsuit claiming the league hadn’t lived up to the negotiation language in their contract. That lawsuit was settled last week, with WBD licensing its popular Inside the NBA show to ESPN and ensuring WBD’s long-standing media partnership with the league will continue in various forms.

However, the days of NBA games on WBD properties are still ending, which means the shareholders involved in the lawsuit aren’t going to be swayed by this bandage.

[THR, Deadline]