US bankruptcy judge blocks NBA team Phoenix Suns' new TV deal

Gray Media

10/05/2023 21:46

By Dietrich Knauth
       NEW YORK, May 10 (Reuters) - A U.S. bankruptcy judge on
Wednesday blocked the NBA's Phoenix Suns from moving ahead with
a television and streaming rights deal for its basketball games,
saying the team violated the rights of its current broadcast
partner, the bankrupt Diamond Sports Group. 
    The Phoenix Suns last month announced they would broadcast
future games to television and online streaming through a
partnership with Gray Television Inc  GTN.N  and video
technology startup Kiswe. 
    U.S. Bankruptcy Judge Christopher Lopez, however, ruled that
the company could not yet move on from its existing contract
with Diamond Sports Group, a bankrupt subsidiary of Sinclair
Broadcast Group  SBGI.O  that broadcasts games through its Bally
Sports TV channels.
    U.S. bankruptcy law protects debtors from having their
contracts modified or terminated without their consent, and
Lopez ruled that the Suns' new TV deal was void because it
interfered with the Diamond Sports' contractual right to
negotiate contract extension. 
    Lopez did not award Diamond Sports any monetary damages on
Wednesday, but said that he would consider a request for damages
at a later hearing. 
    The Suns' attorneys argued that its TV deal with Diamond
expired with the end of the 2022-2023 regular season, and that
the new deal would not interfere with Diamond's rights under its
existing contract. 
    Lopez was not persuaded, saying that the Suns' "media blitz"
touted the new contract as a done deal despite "one line in the
press release" about the Diamond Sports bankruptcy.   
    "The Suns are saying one thing outside the court and another
thing inside it," Lopez said.
    A spokesman for the Suns did not immediately respond to a
request for comment.
    Financial terms of the Phoenix Suns' contracts with Diamond
Sports and with Gray TV were kept sealed in bankruptcy court.
    Diamond televises games for nearly half of all teams in the
National Basketball Association, Major League Baseball (MLB),
and the National Hockey League.
    Diamond filed for Chapter 11 protection in March with a
proposal to cut $8 billion in debt.

 (Reporting by Dietrich Knauth
Editing by Marguerita Choy)
 ((Dietrich.Knauth@thomsonreuters.com;))