The company that owns 19 regional cable networks under the Bally Sports banner has entered a 30-day grace period with creditors after missing a scheduled payment on roughly $140 million of debt.
Diamond Sports Group LLC, a subsidiary of Sinclair Broadcast Group, was scheduled to make the payment on Wednesday. However, the company announced in a statement that it will instead ‘continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives.’
Diamond’s networks have the rights to 42 professional teams – 14 baseball, 16 NBA and 12 NHL. Bloomberg reported last month that Diamond Sports Group has an overall debt of $8.6 billion.
There remains a possibility for Chapter 11 bankruptcy.
Sinclair Broadcast Group – which owns Diamond – bought the regional sports networks from Walt Disney Company for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks in order for its acquisition of 21st Century Fox’s film and television assets to be approved.
Bally Sports Southeast broadcasters Rob Fischer, Brevin Knight, Pete Pranica, and Chris Vernon pose before Memphis Grizzlies-Utah Jazz matchup on March 31, 2021
Diamond’s networks have the rights to 42 professional teams – 14 baseball, 16 NBA and 12 NHL. Bloomberg reported last month that Diamond Sports Group has an overall debt of $8.6 billion. There remains a possibility for Chapter 11 bankruptcy
Diamond has nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter this year. Commissioner Rob Manfred told the AP earlier this week after an owners’ meeting that MLB would be in a position to step in if Diamond was unable to broadcast games.
‘Our goal would be to make games available not only within the traditional cable bundle but on the digital side, as well,’ Manfred said. ‘What we do is largely dependent on how Diamond and the creditors play their cards, what they decide to do.’
Asked whether $1 billion or $2 billion was at stake, Manfred said: ‘Closer with the first number than the second.’
Bally Sports has tried to offset the effects of cord cutting by offering a Bally Sports+ digital package, where fans in some markets would be able to stream their team’s games.
Billy Chambers, who had been Sinclair’s chief financial offer, started work this month with MLB in a new position as executive vice president for local media.
Diamond owns rights to local broadcasts for the Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays and Texas Rangers.
Concerned about a possible bankruptcy, the league formed a new economic study committee.
The existence of the committee was disclosed to The Associated Press earlier this month by a person familiar with the planning who spoke on condition of anonymity because no announcement had been made.
The committee also will examine revenue disparity among MLB clubs.
Los Angeles Dodgers chairman Mark Walter and Detroit Tigers chairman Chris Ilitch are among the committee members, the person said.
Baseball executives have said in recent weeks that the sport needs to prepare in the event that rights-fee payments are not made by Diamond Sports Group.
This offseason, salaries have risen following last year’s agreement on a five-year labor contract with the players’ association. And payrolls rose 12.6 percent to a $4.56 billion last year, breaking the previous record set in 2017, and are set to go even higher this year. The New York Mets, entering their third season under owner Steve Cohen, currently project a payroll of about $370 million – which would smash the previous high of $291 million by the 2015 Los Angeles Dodgers.
MLB’s newest study committee follows a pair in the past quarter-century. One was a joint management-union committee that began after the 1990 lockout and recommended in 1992 to eliminate salary arbitration and make players be eligible for free agency after three years instead of six while rejecting management’s suggestion of a salary cap.
The other was a committee that met in 1999 and 2000, recommending higher luxury tax rates, sharing 40-50 percent of local revenues after ballpark expenses and unequal distribution of new national broadcasting, licensing and internet revenue to assist low-revenue clubs that met a payroll minimum.