Diamond Sports cleared to emerge from bankruptcy after new MLB deals

Sinclair

14/11/2024 19:04

By Dietrich Knauth
       NEW YORK, Nov 14 (Reuters) - Regional sports broadcaster
Diamond Sports Group received court approval on Thursday for a
bankruptcy restructuring that will rebrand its TV channels, trim
nearly $9 billion in debt, and renegotiate broadcast contracts
with six Major League Baseball teams.
    U.S. Bankruptcy Judge Chris Lopez approved the restructuring
after MLB dropped an objection that had challenged the viability
of Diamond's future business plans.
    Diamond will emerge from bankruptcy as "essentially a new
business," more focused on delivering sports games to fans
online, the company's attorney Brian Hermann told Lopez at a
court hearing in Houston.
    As part of the restructuring, Diamond agreed to rebrand its
channels as FanDuel Sports Network, and partnered with Amazon to
stream games on Amazon Prime Video. After emerging from
bankruptcy, FanDuel channels will broadcast games for 13 NBA
teams, 8 NHL teams.
    The company recently reached new broadcast and streaming
agreements with six baseball teams, allowing fans to watch games
online and on cable TV. MLB had persistently opposed Diamond's
efforts to add streaming rights to its deals, and Diamond
recently said it was prepared to cut ties with all MLB teams
except one if it could not rework its contracts. 
    Diamond ultimately reached last-minute, multi-year deals
with about half of its MLB partners, while cutting ties with
others. All of the reworked deals include online streaming
rights, but Diamond did not disclose the length or financial
terms of the contracts. 
    Diamond has new multi-year deals to broadcast games for the
Atlanta Braves, Miami Marlins, Los Angeles Angels, St. Louis
Cardinals, and Detroit Tigers.
    Diamond ended its contracts with the Cincinnati Reds, San
Diego Padres, Arizona Diamondbacks, Cleveland Guardians and
Texas Rangers during its bankruptcy.
    Diamond also introduced a new "pay per game" option for fans
who want to access National Hockey League and National
Basketball Association games without a subscription. 
    Diamond, which previously relied on three cable TV
distributors for more than 80% of its income, filed for
bankruptcy in March 2023, caught between its expensive legacy
contracts with sports teams and a decline in revenue from cable
TV due to sports' viewers cable-cutting.
    Before its bankruptcy filing, Diamond broadcast about 40% of
regular-season baseball, hockey and basketball games in the U.S.
through its Bally Sports-branded television channels.
    The bankruptcy restructuring will wipe out the equity stake
of Diamond's corporate parent, Sinclair Broadcast Group and turn
over ownership of the company to a group of its lenders,
including  PGIM Inc and Hudson Bay Capital Management. The
restructuring will cut Diamond's debt to $200 million from
almost $9 billion.

 (Reporting by Dietrich Knauth; Editing by Richard Chang)
 ((Dietrich.Knauth@thomsonreuters.com))