What Comes Next for Diamond Sports Group After New Carriage Deal with Comcast?
Diamond Sports Group has a new carriage deal with Comcast, but that doesn’t mean its emergence from bankruptcy is assured.
Diamond Sports Group (DSG) can cross one big item off its to-do list. The channel owner reached a new carriage deal with Comcast on Monday night, which will allow Bally Sports regional sports networks (RSNs) to become available for Xfinity TV customers once again. Comcast has more than 13 million cable customers, so reaching a new deal with the cabler was paramount for DSG. But it still has several more steps to go before it can emerge from bankruptcy as a viable business, and it still may not make it to that point.
Key Details:
- Diamond must schedule a new confirmation hearing for its reorganization plan.
- DSG has agreed to carriage deals with 11 of its top 12 partners.
- The company is still seeking new, long-term deals with the NBA and NHL.
Diamond is continuing to make steps in an effort to emerge from bankruptcy as a going concern after nearly a year and a half in the painstaking process. The next step for the company is to try and gain approval for its bankruptcy plan from its creditors at a confirmation hearing, which now must be scheduled. Diamond had a confirmation hearing on July 29, but asked for that date to be moved so it could work out a new deal with Comcast first.
Diamond also has new, multi-year carriage deals in place with Charter Communications and with DIRECTV. Combined with Comcast, the three distributors make up more than 80% of the total Bally Sports audience, so these deals were critically important to securing the future of Diamond.
Altogether, Diamond has agreed to carriage deals with 11 of its top 12 partners. The only one missing from this list is Altice USA, which runs the Optimum cable brand. Bally Sports channels were dropped by Optimum on July 1, and there’s no word on when or if they might return.
Where Does DSG Stand with Top Sports Leagues?
The company also recently acknowledged that it may not be able to get the support it needs for its reorg plan. MLB officials have continuously reminded the court of the league’s position that it wants all of its rights back as soon as possible, and has no interest in doing long-term business with Diamond. MLB commissioner Rob Manfred has not gone as far as forbidding clubs from signing in-market deals with DSG, but he has no plans to get further into business with the broadcaster than he has to.
In fact, Manfred wants to create an in-market streaming service or national RSN package using the in-market rights currently held by Diamond. Some of those contracts don’t expire for years to come, so the only way for Manfred to get those rights is if Diamond fails to emerge from bankruptcy proceedings.
NBA and NHL officials have also shown their impatience with Diamond in recent months. The leagues expressed concern in June that without a carriage deal with Comcast, they did not see much chance for DSG to leave bankruptcy protections as a going concern. A schism almost erupted when the leagues demanded to see carriage contract information Diamond considered to be proprietary, but the NHL and NBA now appear to be back at the negotiating table, trying to hammer out longer-term deals with Diamond. If the company does win approval for its reorganization plan, it can count on a $115 million investment from Amazon as it leaves bankruptcy protections.
The proceedings will be on hold until Diamond can get its reorg confirmation hearing back on the calendar. That shouldn’t take long, and win or lose, that hearing could be a defining moment for the company. It could see its plan approved and move onto the next steps of leaving Chapter 11 protections, or it could be rejected, in which case Diamond would have to try and hastily modify the plan or move onto the liquidation phase, which the company acknowledged last week is still possible.
Bally Sports+
Bally Sports+ is a direct-to-consumer streaming service that offers live games for those who want access to your local Bally Sports RSN without subscribing to a cable or satellite package.