Bally Sports owner declares bankruptcy, citing $8 billlion in debt
Diamond Sports Group, the largest owner of regional sports networks, announced Tuesday that it has filed for Chapter 11 bankruptcy. The move comes after it missed a $140 million interest payment last month.
Diamond, which owns 19 networks under the Bally Sports Regional Sports Networks banner, said it has about $425 million in cash to continue operations during the bankruptcy. These networks have the rights to broadcast games from 42 professional teams – 14 baseball, 16 NBA and 12 NHL.
“DSG will continue to broadcast sports and connect fans across the country with the sports and teams they love,” said David Presslock, CEO of Diamond Sports. said in statement.
The company has filed for bankruptcy in the Southern District of Texas and is negotiating a new deal that would eliminate most of its roughly $8.67 billion in debt. Under the deal, Diamond Sports will become a separate company from its existing parent Sinclair Broadcast Group.
Sinclair bought regional sports networks from The Walt Disney Company in 2019 for about $10 billion. The US Department of Justice forced Disney to sell the RSNs after they acquired them. A major part of 21st Century Fox’s film and television assets.
RSNs were hit hard by the pandemic lockdown.
Diamond Sports isn’t the only company facing financial problems with its regional sports networks. RSNs lost millions of subscribers in the meantime. COVID-19 Lockdowns Empty local bars and restaurants cancel their subscriptions, The Wall Street Journal Reported last month.
Warner Bros. Discovery, which owns three of the AT&T SportsNet networks, has given the Colorado Rockies, Houston Astros and Pittsburgh Pirates until March 31 to reclaim their broadcast rights. WBD is ending its investment in sports networks.
Through Bally Sports Channels, Diamond produces approximately 5,000 live televised games each year.
Diamond has about $1 billion in rights payments, mostly to baseball teams, due in the first quarter of this year. The company is current on payments to hockey and basketball teams, but it may withhold payments from some baseball teams as it tries to renegotiate a better contract.
Major League Baseball has created a local media department in case it has to handle broadcasts for these teams. If that happens, the games will be broadcast locally on the MLB Network or streamed live on MLB.TV.
MLB said in a statement Tuesday that league officials expect Diamond Sports to file for bankruptcy soon.
“Despite Diamond’s financial situation, it is fully expected that they will continue to televise all games they are committed to during the bankruptcy proceedings,” the league said.