Diamond Sports Group’s Bankruptcy Proceedings Could Stretch Through November, Despite Recent Progress
Diamond recently struck a carriage deal for its Bally Sports channels with Charter Communications, but its path out of Chapter 11 protections may be a long one.
There’s no doubt that Diamond Sports Group’s (DSG) fortunes are much improved from this time a year ago. The owner of 18 Bally Sports-branded regional sports networks announced a new, multiyear carriage deal with Charter Communications this week, and all signs point to it emerging from bankruptcy sometime in 2024. But a new report from Cablefax offers more details on Diamond’s plans for the next few months, and it indicates that the company’s bankruptcy proceedings may not be winding up quite as quickly as many observers assumed.
- Diamond filed for an extension of the period allowing it to submit a full Chapter 11 reorganization plan.
- The company is next due in court on April 17, where it hopes to get approval for parts of its restructuring support agreement.
- DSG still has to negotiate new carriage deals with Comcast and DIRECTV, and separate its business from Sinclair among other hurdles standing between it and the end of bankruptcy.
Initially, it was believed by some that the April 17 court hearing for DSG would be a chance for the company to win full approval for its reorganization plan. But it’s time to pump the brakes on those ambitions, as Cablefax reports that Diamond has asked for another extension to file its full reorganization plan, and if granted, the company would have until Nov. 14 to solicit support from its creditors for the plan.
The extension is the maximum allowed under the U.S. Bankruptcy Code, but the company doesn’t necessarily think it will need that much time. Diamond simply believes that asking for a longer extension will be more efficient than continuing to ask for shorter delays and then running out of time.
Diamond has myriad reasons for wanting an extension. It has to separate its business from its parent company Sinclair Broadcasting Group, after the two sides settled a lawsuit by Diamond. As part of the settlement, Sinclair will pay Diamond nearly $500 million. Diamond also has to sort out new distribution deals with its partner leagues; it agreed to short-term deals with the NBA and NHL to send the broadcast rights of the teams it currently owns back to those respective leagues following the 2023-24 season, but those deals are to be nullified in its reorganization plan.
Will Diamond Have a Problem with DIRECTV Extension?
Diamond generated headlines this week because of its above-mentioned new carriage deal with Charter. That deal will see Bally Sports channels remain on Spectrum TV Select Plus plans, which offer a wide range of sports content. Spectrum TV Select Plus subscribers also recently gained access to free ESPN+ accounts, thanks to the September 2023 carriage deal between Charter and Disney.
“We believe this agreement can serve as a model in the ongoing time-sensitive negotiations with our other distribution partners to reach carriage agreements that work for all parties,” Diamond CEO David Preschlak said of the Charter deal.
DIRECTV is one of the partners Diamond has to strike a new carriage deal with, but negotiations may not go as smoothly between the two sides as the Charter discussions did. Diamond and DIRECTV agreed to a short-term carriage deal in October 2023 that runs through September, but relations between the channel owner and the distributor were less than amiable last year. DIRECTV clashed with Diamond several times in bankruptcy court regarding rights fee payments DIRECTV felt were unfair after the Arizona Diamondbacks were dropped by Bally Sports Arizona.
Things could be easier between DIRECTV and Diamond this time. DSG has secured the promise of investment from Amazon, and is expected to win approval for parts of its restructuring support agreement at the April 17 hearing. DIRECTV could have more faith that Diamond will emerge from Chapter 11 as a healthy business, and may be less reticent to sign a long-term carriage deal with the company this time.
Diamond is in a much better place than it was when it entered bankruptcy protection in March 2023. But the company is not quite ready to get back on its feet yet, and it could be late fall before it’s ready to wrap up its bankruptcy proceedings.
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