Diamond Sports Wants to Cut Payments to NBA, NHL Teams by 20%
Diamond Sports Wants to Cut Payments to NBA, NHL Teams by 20%
The company reportedly has secured new carriage deals with Comcast and DIRECTV, but it’s already closing in on its next hurdle.
The end of a critical week for Diamond Sports Group (DSG) has come. A report from the New York Post indicates that the company is nearing completion of its bankruptcy reorganization plan, which is due on Saturday, Sept. 30.
Diamond has already cleared two important hurdles: securing new carriage deals with Comcast and DIRECTV. That means the regional sports networks (RSNs) will continue to be available for Xfinity TV and DIRECTV, DIRECTV STREAM, and AT&T U-Verse customers for the foreseeable future. There had been concern that the company would not be able to secure carriage deals from these providers, which would have left its future very much in doubt.
The Post also reports that DSG is asking the 15 NBA and 12 NHL teams whose games are broadcast on Bally Sports RSNs to take 20% cuts in their rights fee payments for the upcoming season. The report states that the two leagues are leaning toward accepting this offer, as neither are fully prepared to reclaim all of their broadcasting rights at once. The proposed pay cut helps explain why DSG asked for a mediator to help in negotiations with the NHL and NBA in early August.
At this rate, however, it appears DSG is more focused on recouping the money needed to pay off its creditors than surviving in the long term. The Post says that the company is aligning its affairs to survive for one more year, pay off its debts, and then it will close its doors forever.
“This is a reorganization that will become a liquidation,” one source close to the proceedings told the Post.
A short-term deal to keep Bally Sports channels on the air for one more season makes the most sense for all concerned. The NBA and NHL will then have a full year to sort out where teams currently on those RSNs will air games next, without necessitating a last-minute scramble to find new broadcasting partners this season. Disney, NBCUniversal and other companies have expressed interest in picking up local broadcasting rights to NBA teams covered by Diamond, but making that switch so close to the start of the regular season would be highly disruptive.
The NHL season starts even earlier than the NBA’s, so that league is also eager for a solution that doesn’t necessitate it taking over broadcasts of games itself on such short notice. The NBA’s local broadcasting contract with Diamond runs out at the end of the 2024-25 season, which aligns with its negotiating period for its national TV deal as well. Perhaps as part of the fee payment cut request, Diamond will give both leagues early outs from their current deals and allow them to seek new broadcasters after the current season finishes.
More details will be known this weekend when DSG must officially submit its reorganization plan in bankruptcy court. The NBA has promised no interruptions in games if they’re forced off of Bally Sports channels and the Bally Sports+ streaming service this season, but both it and the NHL would rather not have to take on that headache, potentially even if it means taking 20% less from Diamond for the year.
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.