Sinclair Makes Offer to Purchase Bally Sports Regional Sports Networks from Diamond Sports
Sinclair Makes Offer to Purchase Bally Sports Regional Sports Networks from Diamond Sports
SBG made a bargain-basement offer to scoop up the assets of its subsidiary Diamond Sports Group, but would it try to revive the channels or strip them for parts?
What was old is new again, or so Sinclair Broadcasting Group (SBG) would have it. The company first bought its collection of 19 Bally Sports-branded regional sports networks (RSNs) from Disney in 2019, when it paid a hefty $9.6 billion for the channels.
- Sinclair has made an offer to Diamond Sports Group to regain control of Bally Sports channels for $850 million.
- Diamond is still a Sinclair subsidiary, but has prevented Sinclair from having any control in operations since December.
- If Sinclair did purchase Diamond, it would likely strip the company and sell it for parts.
Will Sinclair Buy Back Diamond?
A report from the New York Post reveals that Sinclair is once again interested in purchasing Bally Sports channels (or at least their assets), but for a fraction of the cost it paid in 2019. The Post reports that Sinclair has partnered with Bally’s owner to offer around $850 million to regain control of its subsidiary Diamond Sports Group (DSG), which operates the Bally Sports channels.
But wait…if Diamond is already a Sinclair subsidiary, why would Sinclair have to pay to get control of those channels again? Sinclair has had no day-to-day control over DSG since last December when Diamond’s board voted to strip Sinclair of its duties and appointed David Preschlack as CEO to guide it. In March, DSG entered bankruptcy proceedings which it is still in the midst of, and recently asked the judge overseeing its case to give it until January to turn in its debt restructuring plan. That plan was originally due at the end of September.
Is it Sinclair or Bust for Diamond?
It’s likely that DSG has no interest in getting back into business with Sinclair. In August, it sued SBG, alleging the company improperly funneled $1.5 billion away from its RSN subsidiary before putting Diamond into bankruptcy. Still, Diamond faces dwindling options for its long-term survival, and the offer from Sinclair might be one of its last ways out.
One of Diamond’s biggest problems is that its creditors are running out of patience. DIRECTV recently joined a protest by Major League Baseball at DSG’s request for more time to turn in its debt resolution plan, and the broadcaster is reportedly still negotiating with the NBA on a deal that would allow it to pay that league 20% less for the broadcast rights to 15 teams that Diamond holds. The NBA is leaning toward accepting that deal but wants all of its local rights back by 2025, when it will negotiate its next broadcasting deal and will likely not include RSNs in its plans.
If Sinclair does get DSG back in the fold, the likeliest move is to strip the company and sell the sports broadcasting rights it holds to the highest bidder. SBG knows full well the RSN model is in complete collapse, and it’s highly unlikely it sees Bally Sports RSNs as a long-term source of profits. It’s unclear what would become of DSG’s streaming platform Bally Sports+, which has been experiencing major technical difficulties in recent days, but that platform too would likely be sold or shuttered if SBG regains control of Bally Sports channels.
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.