Diamond Sports Group, the Sinclair subsidiary that operates the Bally Sports RSNs, is reportedly planning to file for Chapter 11 bankruptcy next week.
Diamond owes $140 million in interest payments next week, and would declare the long-expected bankruptcy in lieu of making the payments.
Sportico raised the pressing questions about what happens to the teams whose games air on Bally Sports RSNs, though we still don’t have answers.
For instance, what happens with payment owed to the teams during the Chapter 11 process? More concerning, what do local sports media rights look like in the aftermath, and will leagues like the NBA or MLB get involved more directly?
Last month, Bloomberg reported the potential bankruptcy, noting at the time that it would then lead into a restructuring of the company, which could be completed by May or June. As for the future of local media rights, MLB Commissioner Rob Manfred said the league was prepared to step in and make games available in the event of Diamond declaring bankruptcy.
The bankruptcy declaration, coming in the middle of the NBA and NHL seasons and just prior to the start of MLB Spring Training, could not have worse timing. If rights payments are withheld from teams, a very real possibility, the pro teams whose rights are held by Bally Sports RSNs could be in for a financial crunch in 2023 until this is resolved.
[Sportico]
