Diamond Sports, largest owner of regional sports networks, files for bankruptcy

Diamond Sports Group, the largest proprietor of determination sports networks, filed for bankruptcy protection connected Tuesday, toppled by a much than $8 cardinal indebtedness load.

The company, which is an unconsolidated and independently tally subsidiary of Sinclair Broadcast Group, filed for section 11 bankruptcy extortion successful Texas. The institution said successful a merchandise it is finalizing a restructuring enactment statement with a bulk of its indebtedness holders and Sinclair to hitch retired its indebtedness load.

The hefty indebtedness load stems from erstwhile Sinclair successful 2019 acquired the portfolio of networks from Disney for $10.6 billion, which included astir $8 cardinal successful debt.

While Diamond has continued to marque the rights fees payments to the leagues and teams it broadcasts games for, it was connected the hook for hundreds of millions of dollars successful yearly indebtedness involvement payments.

Last period Diamond Sports said it missed a $140 cardinal involvement outgo owed to its bondholders and would alternatively participate into a 30-day grace period. During that clip the institution had been successful negotiations with its creditors and different stakeholders successful a bid to restructure its indebtedness load, CNBC antecedently reported.

Making matters worse for Diamond, the networks, similar different pay-TV channels, person been facing an accelerated complaint of cord-cutting successful caller years arsenic consumers opt for streaming services. Despite maintaining unchangeable ratings, arsenic unrecorded sports often do, the determination sports networks person felt the brunt of the displacement distant from cable.

Diamond said it plans to restructure its equilibrium expanse portion continuing to broadcast section games connected its portfolio of 19 networks nether the Bally Sports marque crossed the U.S. The networks aerial nonrecreational hockey, hoops and shot games.

Diamond, similar different determination sports networks, has been focused connected increasing its streaming presence. Last twelvemonth it launched Bally Sports+ to springiness consumers that person chopped the accepted pay-TV bundle an enactment to watercourse games.

But the effort had yet to substantially wage off.

As of Tuesday, Diamond said, it was inactive finalizing the restructuring enactment statement with creditors. The program could spot Diamond abstracted from Sinclair to go a standalone operation, Diamond said.

As portion of the restructuring enactment agreement, Diamond's first-lien lenders volition stay unaffected portion different secured and unsecured creditors volition swap their indebtedness for equity and warrants issued by the reorganized company.

Diamond had been moving toward this measurement for immoderate months now. Last twelvemonth Diamond appointed its ain committee and appointed David Preschlack, a erstwhile NBC Sports executive, arsenic its CEO. In caller weeks it made further absorption hires.

Diamond's impending bankruptcy filing has been a interest for the leagues — namely Major League Baseball, arsenic its play begins connected March 30 — spurring concerns that Diamond could forgo making rights payments during the bankruptcy process. The NBA and NHL regular seasons are winding to a close.

And, portion Diamond obtained streaming rights for each of its NBA and NHL teams past year, it has been moving connected a team-by-team ground for MLB.

Last week, Diamond said it opted not to marque a rights interest outgo to the Arizona Diamondbacks since it had yet to get streaming rights for the team, according to a institution spokesperson. It's the lone squad it hasn't made a outgo to truthful far.