Bally Sports Diamond Sports Group Credit: AP

Welcome to the party.  

That may as well have been MLB’s message to the NBA and NHL, that or what took you so long. Since Diamond Sports Group (DSG), the parent of the Bally Sports Regional Network–home to now 18 RSNs–filed for Chapter 11 bankruptcy in March 2023, MLB has been a consistent thorn in the side of the embattled company. The NBA and NHL took a wait and see approach, but that has now changed.

The three leagues at a virtual court hearing today sharply questioned DSG’s plan to emerge from Chapter 11, and strongly urged the judge to push back the scheduled June 18 plan confirmation vote.  At the core of the concerns is DSG’s failure to reach a distribution deal with Comcast, and lack of economic transparency for the DirecTV, Charter and Cox deals that were renewed. DSG has yet to reach an agreement with the NBA and NHL for the ‘24-’25 season, and the leagues want clarity soon.

“As of today, the NHL and its clubs remain in the same uncertain day to day position vis a vis their broadcasting arrangements with the debtors,” said NHL outside counsel Shana Elberg. “And as you heard the NBA say, we similarly cannot head into another offseason in that position.”

Elberg said the NHL had submitted proposals to DSG which the RSN company has not replied to. 

“The likely detrimental impact of the debtor’s inability to respond in the near term to our outstanding proposals is both severe and real,” she said. “Time is of the essence. And we have told the debtors… they need to resolve certain business related matters before June 1, we will continue to try to resolve those matters with the debtors amicably and behind the scenes. But if that’s not achieved, in very short order, we will almost certainly be back to the court on short notice.”

The NBA had a similar message, and in fact served discovery on Diamond earlier this week, a move MLB has already taken. The NBA lawyer used the term “opacity” to describe the NBA’s confusion about Diamond’s financial health..

“The NBA is again concerned that Diamond will be unable to submit a viable business plan that could responsibly be confirmed at a hearing just a few weeks away in June,” said NBA outside counsel Vincent Indelicato. “We’re about a week away from what until just a few moments ago, had been the confirmation objection deadline, and almost a month away from a plan confirmation hearing…We have more questions than answers. At a minimum, we need to understand the economic reality for Diamond of being dropped by Comcast. We need to understand the implications of any Comcast deal that Diamond might plausibly do. And the effects on certain other distribution deals that while they have been announced, have not really disclosed much by way of their material terms. We also believe we need to understand how all of these matters will impact the formulation of Diamond’s business plan, and its viability emerging from Chapter 11.”

MLB’s outside counsel, James Bromley, strongly suggested the June 18 hearing date be postponed, which the judge declined to do, at least not yet.

“We have no information with respect to revenue, and we have no information with respect to major expenses,” said Bromley. “How in the world are we going to be able to have a hearing, which I think is going to be contested, and discovery with respect to the viability of a plan of reorganization when you’re just over 30 days (away), and we have simply no information?”

Outside counsel for Diamond chose to look at the glass as half full, pointing to the extensions with Charter, DirecTV and Cox, which represents about 80 percent of Bally Sports subscribers. DSG also has investment from Amazon, a major legal payout from parent company Sinclair, and further debt financing. And the company’s outside counsel said it is close to a naming rights deal to replace Bally, which is no longer paying fees and whose contract expires after the MLB season.

And Judge Christopher Lopez assumed that cautiously optimistic stance, saying a lot had been accomplished. And that’s true given that originally DSG’s plan was to unwind its operations, but pivoted in January to a plan of reorganization.

“I get where the teams are, I understand it all,” Lopez said. “I read everything…I get it all. And I saw it all there, DSG and let’s just continue down the path. There’s been a lot of good work that’s done. And I don’t want to lose sight of it. And a lot of good updates that have happened over the course of this case. But there still are some serious questions that need to be answered. And let’s just continue to see where we get on.”

Bally Sports currently broadcasts 38 NBA, NHL and MLB teams’ games.

About Daniel Kaplan

Daniel Kaplan has been covering the business of sports for more than two decades. A proud founding reporter of SportsBusiness Journal, he spent the last four years at The Athletic.