Sinclair Claims Diamond Sports Group Will Shut Down After 2024 While Judge Approves Deal with NBA
Sinclair Claims Diamond Sports Group Will Shut Down After 2024 While Judge Approves Deal with NBA
Lawyers from Diamond Sports Group and Sinclair Broadcasting both pointed to the possibility of DSG shutting down after the 2024 MLB season.
Diamond Sports Group (DSG) was back in court on Wednesday for yet another hearing in its bankruptcy proceedings. The company filed for Chapter 11 protections in March, and since then has been attempting to plot out a path to satisfying its debts and emerge as a viable business with its 19 regional sports networks (RSNs) and in-market streaming service Bally Sports+.
- At a Nov. 15 hearing, Diamond got approval from Judge Christopher Lopez on an altered broadcasting deal for the NBA this season, though Sinclair and MLB object.
- Lawyers for both Diamond and Sinclair say the former company could liquidate after the next baseball season.
- Diamond could agree to a similar deal with the NHL as soon as this week, but MLB will be tougher to convince.
What Happened in Diamond’s Latest Day in Court?
It was a good news/bad news kind of day for Diamond on Wednesday. Judge Lopez approved the broadcaster’s new deal with the NBA, which calls for lower rights fee payments to 15 NBA teams by their respective Bally sports channels in exchange for the league reclaiming all of those broadcast at the end of this season, as opposed to the end of the 2024-25 season. The deal means that if your team is on a Bally Sports channel, it will almost certainly stay that way all season long. A similar agreement to be finished with NHL broadcasting after 2023-24 could be agreed to in the coming days.
The bad news is that the deal was objected to by Major League Baseball, as well as by Sinclair Broadcasting Group (SBG). MLB says the proposal made to surrender all of its broadcast rights after the 2024 season ends leaves much to be desired, and it will be sending DSG’s lawyers its own proposal soon.
Sinclair is still nominally Diamond’s parent company, though it hasn’t had day-to-day control over the sports vertical in nearly a year. Still, it says Diamond’s plan for potentially exiting Chapter 11 protections doesn’t factor in that by the end of the 2024 MLB season DSG will owe it $250 million in management fees, and its plan incorporating the new NBA deal doesn’t factor those payments in. Diamond is currently suing Sinclair for $1.5 billion that it says Sinclair improperly funneled away from it.
Is DSG Getting its Final Affairs in Order?
It certainly appears as if Bally Sports channels could wink out of existence after the 2024 MLB regular season concludes next fall. If it gets approval for its NHL deal and comes to a satisfactory settlement with MLB, it certainly looks like its windows will all be aligned to close its doors by that time.
Indeed, lawyers for both Diamond and Sinclair separately said that liquidation of the company after 2024 was a possibility. DSG’s representative stressed that liquidation was simply one of several possible outcomes for the company, while Sinclair said that it seemed more than probable that Diamond would cease to operate in less than a year.
The key factor to keep an eye on in the coming weeks is MLB. It has been anxious to get out from under Diamond since last spring, and even the certainty that it won’t have to deal with the broadcaster after this season may not be enough to get it to let go of its objections. The concerns of MLB about its product reaching enough fans on RSNs is exemplified by the fact that the Minnesota Twins, who are now seeking a new broadcast partner after their deal with Bally Sports North expired in October, were only seen in an estimated 1.3 million out of a possible 4.3 million homes in 2023.
Yet another hearing has been scheduled so that Judge Lopez can listen to Sinclair and MLB’s objections. Observers must now await the outcome of that proceeding, but it does look as if Diamond is finally nearing a resolution of its debts. Unfortunately for employees at the company, that resolution could be liquidation in less than a 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.