Diamond Sports Group, a Sinclair subsidiary that has broadcast rights to 14 MLB teams as well as several NBA, NHL and WNBA teams, announced Tuesday It has filed for Chapter 11 bankruptcy.
The company, which has more than $8 billion in debt, said it expected its Bali Sports regional sports network to “continue to operate normally during the Chapter 11 process,” adding $425 million to fund the business. Cash available.
Under an agreement with its creditors, Diamond will reportedly be separated from Sinclair as a standalone company. CEO David Preslack said he hoped the move would allow the company to restructure for the future while continuing to operate:
“We are using this process to reset our capital structure and strengthen our balance sheet by eliminating approximately $8 billion of debt. The financial flexibility gained through this restructuring allows DSG to provide us with exceptional live sports production will allow our business to grow while providing fans.
The development is troubling for nearly half of MLB teams, which typically rely on payments from their RSNs for a substantial portion of their income.
What will MLB do if Bally Network stops paying?
DSG has been widely expected to go bankrupt since the company announced last month It will miss interest payments of $140 million.
While DSG said it will continue to broadcast games, MLB commissioner Rob Manfred has already outlined what the league intends to do should the company begin missing payments.
The plan, as Manfred explained it, would see the league airing games on local cable as usual while creating a new option to stream local games, which have long been banned under the normal RSN structure. Is:
“We are really clear that if Diamond does not pay under every single broadcast agreement that creates a termination right, and our clubs will move to terminate those contracts. In the event that MLB steps in, what will we do? What will happen is we’ll produce the games, we’ll use our asset, MLB Network, to do that. We’ll go directly to the distributors — Comcast, Charter, the big distributors — and make an agreement to distribute those games to the cable networks. But.
“We will also demand flexibility on the digital side, so that when you go in to watch MLB.tv, you can buy your out-of-market package as you always have, but you will have the in- The option to buy Market games, which I see as a huge improvement for fans.”
Originally, the league would terminate every agreement in which the ball missed payments and produce its own broadcasts, then contact cable distributors to bring those games to television, as well as provide fans with these -Market also overhauls its streaming arm by offering games.
Given that MLB fans have long criticized the practice of RSNs blacking out in-market streaming for MLB.tv subscribers, Diamond’s bankruptcy could be the first step toward a new system of league streaming. Takes it away.
Which MLB teams are affected by Diamond Sports Group’s bankruptcy?
it was As reported Tuesday by the New York Post that MLB will offer free streaming for the four teams whose contracts Diamond is expected to dump in the coming days: the Cincinnati Reds, Cleveland Guardians, San Diego Padres and Arizona Diamondbacks.
In addition to those four, the following teams have local broadcast rights currently owned by Bally Sports Network: Atlanta Braves, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, Texas Rangers and the Tampa Bay Rays.
MLB’s RSN problems go beyond that group, though, as AT&T Sportsnet’s parent company, the string of RSNs that owns the rights to the Colorado Rockies, Houston Astros, Pittsburgh Pirates and Seattle Mariners, said last month. that it plans to shut down the network.
The problem is not limited to MLB, as Bally alone has rights to 16 NBA teams, 12 NHL teams, and four WNBA teams. The timing means that baseball will be the first sport to experience the financial consequences.