US sports broadcaster Diamond begins vote on bankruptcy restructuring (updated)

Sinclair

17/04/2024 20:25

(Adds statements from Diamond in paragraphs 3, 8)
    By Dietrich Knauth
       NEW YORK, April 17 (Reuters) - Regional sports
broadcaster Diamond Sports Group received U.S. court approval on
Wednesday to begin voting on its bankruptcy plan, allowing it to
move ahead with a debt-slashing deal while negotiating
longer-term agreements with cable companies and sports leagues. 
    Diamond, a subsidiary of Sinclair Broadcast Group  SBGI.O ,
is pursuing a restructuring that would eliminate over $8 billion
in debt and provide the company with additional funding from
Amazon.com  AMZN.O  as part of a streaming deal signed in
January. 
        Diamond said in a statement that the court's approval is
"another important step forward in our restructuring and we are
working toward confirming our plan and emerging as a
sustainable, go forward business."
  
    Diamond is also negotiating longer-term deals with cable
companies, the National Hockey League and the National
Basketball Association, Diamond attorney Brian Hermann said at a
bankruptcy court hearing in Houston. 
    Diamond recently signed a new long-term contract with the
cable company Charter Communications  CHTR.O , and it hopes to
build on that success by signing new deals with DirecTV and
Comcast  CMCSA.O , Hermann said. Contracts with those three
companies provide more than 80% of Diamond's revenue, according
to court documents. 
    "We hope to be in a position by the summer to confirm a plan
that is underpinned by deals with at least the three big
distributors as well as the two leagues that I mentioned,"
Hermann said in court. 
    Diamond, which broadcasts about 40% of regular-season
baseball, hockey and basketball games in the U.S. through its
Bally Sports-branded television channels, has not reached a
bankruptcy deal with Major League Baseball. 
    The company has cut ties with two baseball teams during its
bankruptcy, and it continues to broadcast games for 12 more
teams. Diamond said it is not currently re-negotiating its MLB
contracts.
    MLB, which opposed Diamond's effort to stream more baseball
games directly to fans online, said in an April 10 court filing
that it has "serious concerns" about whether Diamond can become
a sustainable business after its bankruptcy restructuring.  
    The NHL and the NBA also expressed concerns last week,
saying that the uncertain status of Diamond's negotiations with
cable providers made it difficult for the leagues to plan ahead
beyond 2024. 
    Both indicated more willingness to work with Diamond than
the MLB in their recent court filings, with the NHL saying it
was "hopeful" and the NBA saying it had "worked tirelessly" in
support of Diamond's restructuring.
    At Wednesday's hearing, U.S. Bankruptcy Judge Christopher
Lopez approved Diamond's request to begin voting on its plan,
setting a May 22 deadline for votes and scheduling a June 18
hearing to consider final approval of Diamond's restructuring
plan. 
    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. The sports broadcaster had
been headed toward a liquidation of its business before reaching
a restructuring deal in January with its lenders, Sinclair and
Amazon.

 (Reporting by Dietrich Knauth; Editing by Alexia Garamfalvi and
Leslie Adler)
 ((Dietrich.Knauth@thomsonreuters.com;))