Judge Blocks Efforts by Phoenix Suns, Mercury to Leave Diamond Sports for Local Broadcast Channels
The Phoenix Suns’ attempt to leave cable behind has been blocked so hard, some fans might be wondering if Dikembe Mutombo was judging the case.
In late April, the NBA’s Suns and the WNBA’s Phoenix Mercury announced that they had struck a deal with Gray Television, who henceforward would distribute the teams’ games on local broadcast television stations. As part of the deal, the streaming startup Kiswe would provide a direct-to-consumer (DTC) streaming option that would not require a pay-TV subscription to access.
Suns and Mercury games are currently broadcast by Bally Sports Arizona during the regular season. The regional sports network’s parent company Diamond Sports Group (DSG) is currently in bankruptcy court, attempting to restructure a debt load of more than $8 billion. DSG objected to the deal between Gray and the two teams, saying it violated bankruptcy code and constituted a breach of contract.
Judge Christopher Lopez, who is shepherding DSG and its various creditors through bankruptcy court, agreed with the company in a ruling handed down this week on Thursday. Judge Lopez ruled that the teams had violated a section of U.S. bankruptcy code, because once Diamond received Chapter 11 protections, an automatic stay was placed on all of its contracts. He added that the teams must come to a mutual agreement with DSG, and find an independent appraiser to assess the value of their broadcasting rights.
The Suns unsuccessfully argued that their contract with Diamond came to an end following the conclusion of the regular season. In a statement, a Suns spokesperson told CNBC that the two teams “are excited to continue giving our fans everything they want for the best possible experience and making our games accessible to everyone. We are committed to working collaboratively on a fair resolution that will be in the best interest of our fans, our community, and our players.”
Until that resolution is reached, it looks as if Mercury games will continue to air on Bally Sports Arizona. The WNBA regular season starts Friday, May 19, meaning that there is essentially no chance the situation is resolved before the Mercury start playing. Suns games will be unaffected for now; though the team is still in the NBA playoffs as of the time of this writing, NBA playoff games will be shown on national networks like ESPN, ABC, and TNT for the rest of the 2023 postseason.
Regional sports networks (RSNs) like Bally Sports Arizona might not be in the NBA’s plans for much longer, despite Diamond’s fervent attempts to keep itself afloat. Although the league renewed its deal with Diamond in February, the agreement only runs through the 2024-25 season. That’s when the NBA’s national broadcast rights become available as well, and judging from comments made by NBA commissioner Adam Silver in late April, the odds of the league returning to RSNs are low indeed.
“There’s no doubt that … we need to reimagine these [RSN] relationships,” Silver said. “There’s the specific issue in terms of [Diamond Sports Group] with the debt they had and correcting that issue. Then in terms of the fundamentals of the business, everyone sees what’s happening in the television market. You’ve had a dramatic decline in the number of television homes.”
For now, Suns and Mercury fans are stuck in legal limbo, as they await the results of an appraisal of the teams’ broadcast rights. Much like Diamond's dealings with Major League Baseball, the situation could drag out, leaving all sides embittered and a little lighter in the pocket due to legal fees at the end.