Diamond Sports Group Asks for Mediator Intervention with NBA, NHL as Reorganization Plans Continue
Diamond Sports Group (DSG) is trying to leave no stone unturned as it tries to reorganize itself in bankruptcy court. According to Front Office Sports, the parent company of the Bally Sports collection of regional sports networks (RSNs) has filed another motion this week, a request for mediation with the NBA and NHL and its other creditors to help it alleviate its debt load of over $8 billion.
“The debtors [DSG] have been hard at work on an updated business plan to right-size their business and balance sheet given the tectonic shifts impacting the entire cable industry to increased subscriber churn,” said Diamond’s filing. “The debtors believe that the time for appointment of a mediator or mediators is now.”
The company was recently granted an extension of bankruptcy protections for a further 80 days, as it still has myriad issues to resolve. Now the company has to decide which (if any) of the 27 NHL and NBA teams it wants to give up as it seeks a path to normal business operations. That decision will have a big impact on its negotiations with cable providers.
DSG’s carriage contracts with top providers like Comcast, DIRECTV, and Spectrum are set to expire this fall, so the company is already in discussions with them to try to keep its channels on their services. Diamond will have a hard enough time convincing those providers to continue carrying Bally Sports RSNs with all of its NBA and NHL teams still in the fold, which is one reason it’s so desperate to try mediation and any other measures to keep them.
There are other companies waiting in the wings if Diamond does surrender local broadcasting and streaming rights to any of these teams. Amazon, Apple, Disney, and other companies have all at least checked in with the NBA to say they’d be interested in acquiring those rights if they were given up by DSG.
The NBA’s current contract with Diamond has a number of pathways out of the deal for the league if DSG is unable to show every game as obligated. It’s not currently clear if the NHL has any such recourse, but both leagues have expressed an expectation that Diamond will live up to its contracts with them.
It’s been a long six months for DSG, as it has continually sparred with Major League Baseball regarding its rights. Fans will at least get an answer to how much longer teams will stay affiliated with Bally Sports in the next few months, but whether that answer is a few more months or a few more years has yet to be determined. Perhaps Diamond’s new request for a mediator will help break some negotiation logjams and lead to a breakthrough.
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