Diamond Sports Group May Drop as Many as 5 NBA Teams to Emerge from Bankruptcy
The teams in question are already exploring options for putting their local games on free broadcast channels in their markets.
There’s no word yet on when Diamond Sports Group will head back to bankruptcy court to seek a vote on its reorganization plan, but there are new details on what the company might do if it wins approval on that vote. A report from Sports Business Journal says that Diamond is continuing to work on a long-term deal with the NBA, but that deal will most likely include big cuts in rights fee payments to 10 teams, and that as many as five clubs may be dropped by Bally Sports regional sports networks (RSNs) altogether.
Key Details:
- The Grizzlies, Mavericks, Pistons, Pelicans, and Thunder are the five teams that could be dropped by Bally Sports.
- The other 10 NBA teams the company partners with may slash rights fee payments by up to 40%.
- The league has discussed the possibility of allowing Amazon to distribute local games for some clubs.
The five teams under threat of being banished from Bally Sports channels and the Bally Sports+ streaming service are the Dallas Mavericks, Detroit Pistons, Memphis Grizzlies, New Orleans Pelicans, and Oklahoma City Thunder. These teams are likely making so much money from their deals with Diamond that it can’t figure out how to make their broadcast rights profitable in its reorganization plan. SBJ reports that two of the teams could still get a reprieve and remain on Bally Sports channels, but at this point, the situation is fluid.
If these teams do leave their respective Bally Sports channels, they will explore the option of going to over-the-air (OTA) broadcast networks. The Phoenix Suns were the first NBA team to leave a Bally Sports channel in favor of local OTA channels, and the Utah Jazz also broke with an RSN in favor of a free broadcast network last season. Both the Jazz and the Suns have in-market streaming options to allow fans to stream games, as well.
Four of these five teams had short experiments with placing their games on OTA channels at the end of the 2023-24 campaign, to prepare for a possible future where they no longer had an RSN partner. Many teams are wary of moving to OTA networks; the Jazz, for instance, were able to grow their viewership by switching to a broadcast/streaming combo, but league sources said that the team only earned about 60% of their in-house revenue projections in their first year. Still, one industry source told SBJ that a one-year sample size isn’t enough to learn the full picture of NBA teams moving from cable to broadcast channels.
“I think that transition isn’t a one-year thing,” the insider said. “The marketplace doesn’t react that quickly … I think that the long term play of them hitting their projections, maybe it’s delayed by a year or two, but they’ll eventually get everybody up to the numbers that they’re thinking about.”
What Happens to the Other 10 NBA Teams Partnering with Diamond?
If Diamond is able to win approval for its reorganization plan, the NBA teams that are still with the network could see the fees they collect from the broadcaster cut by 30% or 40%. These teams still project that decreased revenue as an improvement over what they’d make by going to OTA channels, but it will still be a difficult pill to swallow. However, the record-breaking rights deal that kicks in ahead of the 2025-26 season will likely soothe their concerns.
If Diamond doesn’t get out of bankruptcy and ends up having to liquidate, SBJ reports that the NBA is considering allowing Amazon to buy local rights to former Bally Sports teams and distribute them in their respective markets. MLB officials have considered a similar national RSN platform, and distributing games on Prime Video would allow the league to expand its viewership. Prime Video is also set to begin broadcasting national NBA games in 2025, unless Warner Bros. Discovery figures out a way to put the kibosh on that deal.
When asked by SBJ if Prime Video could host a national RSN platform, Amazon’s head of sports Jay Marine said, “I don’t know. I wouldn’t want to speculate. I think the local markets and that RSN business model is going through, obviously, disruption and a time of transition. I do think local games are very valuable because a local fan base is incredibly passionate. [Local ratings] are high. But how everything shapes out, we’ll just have to wait and see.”
The as-yet-unscheduled confirmation hearing for Diamond Sports Group’s bankruptcy reorganization plan will likely be put on the calendar after the broadcaster agrees to long-term deals with the NBA and NHL. But it appears those deals could include markedly fewer teams on Bally Sports channels than are available there now.
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