Diamond Sports Group Seems Poised to Emerge From Bankruptcy After ‘Really Good Day’ in Court
Diamond Sports Group Seems Poised to Emerge From Bankruptcy After ‘Really Good Day’ in Court
Judge Christopher Lopez called DSG’s latest agreements with its debt holders as a “big step forward” for the company’s future hopes.
It wasn’t all that long ago that it seemed like Diamond Sports Group (DSG) was circling the drain. The sports broadcasting company — which owns and operates 18 regional sports networks (RSNs) under the Bally Sports brand, as well as the Bally Sports+ streaming service — seemed to be aligning its affairs in bankruptcy court to wind down operations after the conclusion of 2024. However, according to reporting from Sportico, after a good day in court this week, the company appears more likely to emerge from bankruptcy proceedings as a going concern in the coming months.
- Diamond got approval to obtain $450 million in financing on Monday.
- The company has deals in place with the NBA, NHL, and MLB for the 2023-24 seasons.
- If Diamond emerges from bankruptcy, an investment from Amazon is waiting in the wings.
Appearing before Judge Christopher Lopez in court this week, Diamond’s representatives got approval to secure $450 million in debtor-in-possession financing. Usually, these types of financing deals are only available to companies in bankruptcy proceedings if the investment is likely to provide a greater return to lenders than the liquidation of the company’s assets would.
Most of this $450 million would be used to pay off Diamond’s first-lien debt holders, while the rest would be added to DSG’s balance sheet. Lopez also approved the settling of a case between Diamond and its parent company Sinclair Broadcast Group; DSG had pursued legal action against Sinclair for allegedly improperly funneling money away from its sports broadcaster ahead of its bankruptcy proceedings. DSG and Sinclair agreed to settle that case in exchange for a cash payment of $495 million from Sinclair to Diamond, but the deal hinged on court approval.
In addition, Diamond has aligned all of its deals with the NBA, NHL, and MLB to end following their respective 2023-24 seasons. Early in February, DSG struck a deal with the three MLB teams whose broadcast agreements with Diamond were formerly unprofitable for the company to keep airing their games this year.
Is Diamond Poised to Survive for the Long Term?
When speaking about the new arrangements agreed to between Diamond and its various creditors, Judge Lopez said on Monday that it had been “a good day, a really good day, for Diamond Sports.”
“This is another huge step forward in the debtors’ emerging from Chapter 11,” the judge continued.
If Diamond does escape from bankruptcy proceedings, there’s even more money awaiting it from Amazon. That company will fork over $115 million in convertible notes once Diamond is a going concern again, in a deal that will also see Bally Sports content become available through Amazon’s Prime Video Channels platform.
The NBA currently has 15 teams whose games are broadcast by a Bally Sports RSN in their home market, and the NHL has 11 teams currently in business with DSG. No matter what these leagues decide to do with their streaming rights, they will likely be relieved if Diamond stays in the broadcasting business past this year. Renewed partnerships between both leagues and the company are likely if Diamond does escape bankruptcy proceedings, as the company gives the NBA and NHL a proven broadcast partner and saves those teams the trouble of finding new distributors for their games.
As of now, it appears that MLB is perfectly fine with seeking new broadcast partners after the 2024 season is over. Relations between MLB and Diamond have been outright contentious for most of its bankruptcy court proceedings, and commissioner Rob Manfred wants to create a league-run streaming platform with as many teams as possible for launch by 2025. To do so, he’ll need the streaming rights to the five teams currently held by Bally Sports+.
The latest news from Diamond’s bankruptcy proceedings does not represent a guarantee that DSG will emerge from bankruptcy court as a viable business, but it is the surest sign yet that the company is not as doomed as it appeared to be several months ago. DSG has received approval for a new financing deal and a settlement with Sinclair in bankruptcy court, two big steps toward emerging from its nearly year-long bankruptcy case.
Bally Sports+
Bally Sports+ was a direct-to-consumer streaming service that provided live, in-market games without requiring a cable or satellite subscription. It allowed fans to watch their local Bally Sports regional sports network (RSN) without a traditional TV package.