Diamond Sports Group can emerge out of bankruptcy after having reorganization plan approved
Diamond Sports Group, the largest owner of regional sports networks, can emerge out of bankruptcy after having its reorganization plan approved Thursday.
Judge Christopher Lopez gave the go ahead during a hearing in U.S. Bankruptcy Court in Houston that lasted 90 minutes.
“This case was no layup, not for anyone. A lot of hard work went into this,” Lopez said during the hearing.
Diamond Sports had been in Chapter 11 bankruptcy proceedings in the Southern District of Texas since it filed for protection in March 2023. The company said in a financial filing last year that it had debt of $8.67 billion.
Diamond will emerge out of bankruptcy with significantly less debt — around $200 million — but also with fewer teams and networks.
When Diamond entered bankruptcy, it owned 19 networks under the Bally Sports banner and had the rights to 42 professional teams (14 baseball, 16 NBA and 12 NHL).
The reorganized company now operates under the FanDuel Sports Network banner after agreeing to a naming rights deal last month. It has 16 networks and carries games for 27 franchises (six baseball, 13 NBA and eight NHL).
The 16 networks cover fans in 31 states. The company expects to complete the restructuring process in the coming weeks.
“Today is a landmark day for Diamond, as we embark on a new path for our business. Diamond is now unencumbered by legacy debt, financially stable and enthusiastically supported by new ownership,” Diamond CEO David Preschlack said in a statement. “Looking ahead, Diamond is well-positioned to further enhance its product offering and remains committed to delivering the highest quality live sports content in-market to fans through both linear and direct-to-consumer frameworks.”
Last month as part of the reorganization plan, Diamond voided the contracts of the Detroit Tigers and Tampa Bay Rays while attempting to rework the deals of the five franchises that had partial ownership of their regional sports networks.
Diamond has revised deals with the Tigers and Rays, as well as reaching agreements with the St. Louis Cardinals, Los Angeles Angels and Miami Marlins, which include streaming rights. Talks are continuing with the Kansas City Royals.
The Cincinnati Reds and Diamond have ended their joint venture, but a lawyer for Diamond said during Thursday’s hearing that they would be open to resuming discussions. Shortly after the hearing, Major League Baseball announced it will produce and distribute Reds games next season.
Cincinnati had a 20% stake in their RSN affiliate. Diamond bought back the Reds’ stake for $1.
Atlanta was the only franchise whose contract would have been unchanged, but the Braves have agreed to an amended deal, which include streaming rights.
Steaming is an important avenue for Diamond as it seeks to find new audiences. The company announced on Wednesday it reached a multiyear agreement with Prime Video to make its channels available as an add-on subscription.
Prime Video announced earlier this year that it would buy a minority stake in Diamond Sports.
Diamond will also offer single-game pricing on its direct-to-consumer app for NBA and NHL games beginning Dec. 5.
Viewers will have the option for single games at $6.99, as well as the chance to sign up for monthly or season pass subscriptions.
Diamond Sports Group and Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox’s film and television assets to be approved.
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AP sports: https://apnews.com/hub/sports
By JOE REEDY
AP Sports Writer
