Diamond Sports Group recently reached a deal for carriage renewal with FuboTV, securing distribution of the Bally Sports-branded regional sports networks through the platform. In recent months, Diamond Sports Group has completed carriage renewals with Charter, Cox and DirecTV, but it has still been unable to reach an agreement with Comcast, which is said to provide 80% of the company’s revenue. As Diamond Sports Group seeks to enter Ch. 11 bankruptcy, there has been concern addressed by Major League Baseball, the National Basketball Association and the National Hockey League pertaining to the viability of the company.
The Sinclair subsidiary was approved for $450 million in debtor-in-possession finance as it seeks to actualize a proposed restructuring. The allocation of such remuneration will be $350 million to pay its first-lien debt holders. Additional funds therein will be transferred the remainder to the company balance sheet. Under the terms of the proposed restructuring agreement, Diamond would continue to broadcast regional games while also accepting investment from Amazon, which agreed to pay $115 million in convertible notes upon the conclusion of the bankruptcy. Junior creditors would then assume operations of the subsidiary.
On Thursday, Diamond Sports Group filed a motion with the Houston bankruptcy court overseeing the case to propose a 41-day extension for the confirmation hearing. Although it was not listed in the document, granting such modifications would presumably allow more time for Diamond and Comcast to try and reach terms on an agreement. If the alteration is granted, Diamond’s confirmation hearing would take place on Monday, July 29. The company is also in the process of trying to negotiate deals with the NBA and NHL.
Following the conclusion of an MLB owners’ meeting in New York, Major League Baseball Commissioner Rob Manfred addressed the ambiguity surrounding the future of Diamond Sports Group. Bally Sports-branded regional sports networks have not been broadcast by Comcast since the end of April, something MLB counsel James Bromley called “devastating” with several teams “facing substantial problems” as a result.
Manfred is not yet sure about the league’s support pertaining to Diamond Sports Group’s reorganization plan, but he still expects the company to carry regional games for the 12 MLB teams for which it has rights through the conclusion of the 2024 season. Major League Baseball continues to produce and disseminate games for the San Diego Padres and Arizona Diamondbacks as it did last summer, along with the Colorado Rockies after AT&T SportsNet Rocky Mountain ceased operations at the end of last year.
“It’s hard to comment on whether we’re going to object or not because there is no plan at this point,” Manfred said. “Their whole plan is, you know, ‘We’re going to get deals with distributors…. We’re going to continue with the other leagues.’ They don’t have a deal with the NBA, they don’t have a deal with the NHL, and they don’t have a deal with us.”
MLB looks to develop its own streaming platform and has reportedly had discussions about nationalizing television rights for games. In testimony last year, Manfred recalled a meeting between him and Sinclair Broadcast Group executive chairman David Smith. Smith asked Manfred to grant the company direct-to-consumer broadcast rights to bolster its Bally Sports Plus app, to which Manfred replied that it would not happen, and that people cannot always get what they want. In response, Smith said that he would squeeze clubs to diminish rights fees to make sure he stayed profitable in the RSN business. If they did not agree to that, he explained that he would put Diamond Sports Group into bankruptcy and then selectively reject contracts.
“Right now we’re really focused on the strategic part,” Manfred said. “How is it that we respond to the changes in the local media environment in a way that increases our reach and fan access to our games? We’d like to get into a model where whether you’re a dinosaur cable person like I am or a digital person, there is a frictionless opportunity to watch the game that you want to watch.”
