The largest broadcaster of local sports in US filed for bankruptcy, but still hopes broadcasts won't be disrupted
- Diamond Sports Group has filed for Chapter 11 bankruptcy protection and will restructure.
- Diamond operates the largest group of regional sports networks in the country, covering dozens of NBA, MLB, and NHL teams.
Diamond Sports Group, the largest broadcaster of local sports in the US, has filed for Chapter 11 bankruptcy protection as it plans restructuring to eliminate about $8 billion in debt.
Diamond, which is a subsidiary of local TV giant Sinclair Broadcast Group, operates the Bally regional sports networks, commonly referred to as RSNs, for 16 NBA, 14 MLB, and 12 NHL teams, broadcasting thousands of regular season sporting events per year.
A restructuring agreement, while still being finalized, was announced Tuesday evening and will separate Diamond from Sinclair. The company expects that it will be able to function normally during the restructuring.
"DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love," Diamond CEO David Preschlack said in a statement. "With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company."
The move was largely expected after the company missed $140 million in interest payments last month, and reports emerged that Diamond was negotiating with creditors on next steps, including restructuring debt and debt forgiveness in exchange for equity in the new, standalone company.
The Athletic reported that MLB said last month and again in a statement Tuesday that it expects Diamond to be able to broadcast games during the restructuring, but the league also is prepared to broadcast games if Diamond or another RSN is unable to do so. MLB created a "local media group," hiring several executives with decades of experience in regional sports broadcasting.
The bankruptcy filing from Diamond comes amid larger troubles in the RSN industry, which has been one of the most profitable forms of TV for decades due to its consistent audience and the high rights-fees, included in cable TV packages for years. However, as cord-cutting grew and streaming became more prevalent, the profit of the channels began to shrink.
Last month, Warner Bros. Discovery announced that it planned to exit the regional sports business, and sever ties with its struggling AT&T Sportsnet channels, which broadcast games for several MLB, NBA, and NHL teams.
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