Diamond Sports Files for Bankruptcy

Three days before the expiration of a 30-day grace period it agreed into with creditors, Diamond Sports Group, a Sinclair subsidiary that handles the regional sports networks for 42 clubs across Major League Baseball, the National Hockey League, and the National Basketball Association, stated that it has filed for Chapter 11 bankruptcy Tuesday night.

Diamond Sports, which has more than $8 billion in debt, intends to use the procedures to reorganize and improve its balance sheet, according to their press release, said ESPN.

Moreover, RSNs will continue functioning in the ordinary course while on the Chapter 11 process. Diamond also noted that it had $425 million in cash on hand to keep operating during the process, the press release added.

Diamond's situation impacts MLB most greatly, whose teams make much money from RSN deals with companies like Sinclair.

MLB's season starts in less than three weeks, so Diamond Sports must continue paying 14 major league teams for their rights fees, or teams could break their contracts, and MLB might take over broadcasting responsibilities.

Diamond Sports Struggles to Pay its Debts

Sinclair acquired Disney's portfolio of networks in 2019 for $10.6 billion, which included approximately $8 billion in debt, resulting in a substantial debt load, according to CNBC.

Diamond was responsible for making annual debt interest payments totaling hundreds of millions of dollars, even though it has continued to pay the rights fees to the leagues and teams its broadcasts games for.

Diamond's situation is made worse because the networks, like other pay-TV channels, have been experiencing an increased rate of cord-cutting as consumers choose streaming services.

Regardless of keeping up with stable evaluations, as live games frequently do, the local games networks have felt the brunt of the shift away from the cable.

Diamond has focused on expanding its streaming presence like other regional sports networks.

It introduced Bally Sports+ the previous year to offer game streaming to customers who had opted out of the standard pay-TV bundle, but the effort had barely paid off.

MLB to Stream Games for Free Following Diamond Sports Chapter 11 Bankruptcy

Major League Baseball intends to step up and broadcast games of around a half-dozen teams from a regional sports networks provider destined for bankruptcy so that fans do not miss a match, NY Post reported.

Diamond Sports owns the home broadcast rights for 14 baseball teams, but sources who know the situation told The Post that the financially troubled company would likely file for bankruptcy on March 17, just a few days before the season starts on March 30.

Diamond, operating under Bally Sports, would likely use the Chapter 11 bankruptcy proceedings to terminate at least four team contracts that are not earning enough revenue through ads and cable contracts, said two sources familiar with the situation.

The teams in danger are Arizona Diamondbacks, Cincinnati Reds, San Diego Padres, and Cleveland Guardians.

Diamond consistently loses roughly $20 million a year on San Diego Padres alone, the source continued.

MLB commissioner Rob Manfred plans to have the league take over the local broadcasts of the losing clubs and stream them for free in their respective local markets. At the same time, he negotiates with their cable companies for reduced prices, the source said.

MLB has yet to decide how fans in the blacked-out markets will be able to watch the free games, but at the moment, the MLB.TV app allows fans to pay to see games in other cities.

This article is owned by Latin Post.

Written by: Bert Hoover

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