Diamond Sports Commits to Broadcast NBA, NHL Through This Season; MLB Relationship Still Unresolved
The entire sports-viewing world has been anxiously awaiting the outcome of bankruptcy court proceedings for Diamond Sports Group (DSG). Diamond owns 19 regional sports networks (RSNs) operating under the Bally Sports brand, which cover a total of 14 MLB, 16 NBA and 12 NHL teams. The company also owns Bally Sports+, a streaming service that allows users to bypass pay TV to watch their favorite team.
DSG officially filed for bankruptcy on Tuesday, March 14, and is now in the midst of ongoing discussions in court about how it plans to restructure and become a viable money-making enterprise once again. Some of those discussions were held on Thursday and they revealed part of DSG’s strategy, as well as responses by some of the major sports leagues it does business with.
To start, Diamond representatives reaffirmed their commitment to broadcasting the rest of this season’s NBA and NHL games as planned. Brian Hermann, a lawyer representing DSG in its bankruptcy proceedings, noted that negotiations had been ongoing with those two leagues, and the discussions have been positive thus far.
“We had very constructive discussions with the NBA and the NHL,” Hermann said. “And I’m pleased to say I’ve made good progress in negotiations with each and we are going to continue to work with each of those leagues and their representatives to try to get to an agreement that will allow us to position the company for long-term success …There’s no doubt that we intend to pay NBA and NHL teams, they’re what we owe them for broadcast rights, at least through the end of the season.”
Hermann also pushed back against the notion that DSG was circling the drain as a company, and reaffirmed that it was still hoping to attract more teams and leagues to doing business with it.
“I want to make it crystal clear that Diamond is open for business, and we’re not going anywhere,” he said. “There’s all kinds of press about Diamond going under, Diamond isn’t going to be able to broadcast games. Completely wrong. We’re not going anywhere.”
NBA representatives at the hearing were glad to hear DSG’s commitment to the rest of the current campaign, but noted that next season’s broadcast agreements with the company are still up in the air. NHL’s legal team was present for the hearing but did not offer any statements for the record.
“Given the value of our rights and their importance to Diamond, we believe we are entitled to receive the same treatment for next season, but have yet to reach an agreement with [DSG],” said an attorney from Prosaker Rose, which is representing the NBA in discussions with Diamond.
One thing that was noted repeatedly by DSG representatives in the call was the tenor of discussions between the company and the NBA/NHL as opposed to discussions with Major League Baseball. DSG’s relationship with MLB has consistently deteriorated since October, as Diamond has sought to obtain more streaming rights from the league. Currently, DSG has the streaming rights to just five of the 14 MLB teams it has broadcast rights for.
Baseball’s representatives at the proceedings did not mince words about the situation they feel DSG has put itself in.
“We are dealing with a broken model, [and it] is not the responsibility of Major League Baseball to fix [RSNs] up,” MLB reps told the judge.
They also reaffirmed the league’s willingness to step in and reclaim its broadcast rights if DSG does not make its scheduled payments in full.
“To the extent that there’s any failure in performance, economic or operational, we will be back before your honor looking for prompt relief, perhaps on an emergency basis,” the MLB’s lawyer said.
There was little mention of the report that DSG had elected to reject the four most expensive MLB contracts it currently holds. Diamond’s reps did note that it would be missing a scheduled rights payment to the Arizona Diamondbacks, which may allow MLB to exercise a termination right on all of its MLB contracts.
Diamond sees MLB’s aggressiveness in seeking to reclaim its rights and potentially set up an in-market streaming service (as many league officials have discussed potentially doing) as a way to push them out of the market altogether.
“The Commissioner’s Office has made clear that they do want to take back the rights, which will effectively drive us out of the market if they are successful,” Hermann said.
There are still plenty of questions to be decided, but DSG is still insistent it will be able to meet its broadcast obligations to all of its teams. Now, it’s up to the judge to determine whether the company has made sufficient provisions to keep itself operational when it leaves the shelter of Chapter 11 protections.
Bally Sports+
Bally Sports+ is a direct-to-consumer streaming service that offers live games for those who want access to your local Bally Sports RSN without subscribing to a cable or satellite package.