Sports leagues question whether broadcaster Diamond can survive without Comcast

Sinclair

15/05/2024 22:07

By Dietrich Knauth
       NEW YORK, May 15 (Reuters) - Major League Baseball, the
National Hockey League and the National Basketball Association
said on Wednesday that bankrupt broadcaster Diamond Sports may
not survive without a new deal with cable distributor Comcast
 CMCSA.O .
    The sports leagues told a bankruptcy judge at a court
hearing in Houston that they need more information about a
negotiating impasse that caused Diamond's Bally Sports-branded
channels to be pulled from Comcast at the start of May, with
baseball season underway and the NBA and NHL in the midst of
postseason playoffs. 
    Diamond, a subsidiary of Sinclair Broadcast Group  SBGI.O ,
had been pushing to finalize its bankruptcy restructuring by
June 15, but the sports leagues said Diamond must first reach
deals with the three major cable partners, including Comcast,
that provide 80% of the company's revenue. 
    Without those deals, Diamond's revenue might not be enough
to sustain its business, and the leagues may have to seek
alternative broadcast arrangements for the teams currently under
contract with Diamond. Diamond currently broadcasts games for
over one-third of NBA, NHL and MLB teams. 
    "Sitting here today, we don't know what the go forward plan
is, or even if there is a viable plan," the NHL's attorney Shana
Elberg said. "We cannot head into another offseason in that
position."
    U.S. Bankruptcy Judge Christopher Lopez urged Diamond to
keep working on its bankruptcy restructuring and to provide more
information to the sports leagues at a status conference in two
weeks. 
    "There's been a lot of good work that's been done, and I
don't want to lose sight of that," Lopez said. "But there are
still serious questions that need to be answered."
    The NBA and NHL had, until now, been supportive of Diamond's
restructuring efforts, staying largely on the sidelines in the
company's bankruptcy while it worked out deals with other
stakeholders. Diamond has said it intends to reach new long-term
broadcast deals with NBA and NHL teams as part of its
restructuring.
    MLB, which was already at odds with Diamond over the
broadcaster's desire to stream more games to fans online, has
seen two teams' broadcast contracts canceled during the
bankruptcy, and suffered further disruption when Comcast removed
Bally Sports channels in May. 
    Diamond's inability to reach a deal with Comcast was a
"potentially insurmountable obstacle" that had already proven
"profoundly harmful to MLB" and its fans Major League Baseball
wrote in a court filing ahead of the hearing. 
    Diamond has said it is continuing to negotiate with Comcast,
and it has reached long-term agreements with its other critical
cable partners, DirecTV and Charter.
    Diamond filed for bankruptcy in March 2023, caught between
expensive broadcast rights agreements and a drop in revenue due
to cord-cutting by sports viewers.

 (Reporting by Dietrich Knauth
Editing by Bill Berkrot)
 ((Dietrich.Knauth@thomsonreuters.com;))