- The NBA and NHL voiced concerns on the viability of Diamond Sports’ business during a status conference in bankruptcy court on Tuesday.
- Diamond Sports, which owns the largest portfolio of regional sports networks, has been under bankruptcy protection since last year.
- The leagues have been hoping for a resolution on Diamond Sports’ future ahead of the coming NBA and NHL seasons.
The National Basketball Association and National Hockey League are concerned over Diamond Sports’ future, and whether the regional sports network owner can put together a viable business plan ahead of the upcoming seasons this fall.
Diamond Sports — which operates its networks under the Bally Sports brand — has been under bankruptcy protection since March of last year. The leagues are worried the owner of the largest portfolio of regional sports networks won’t have a viable business plan sorted out ahead of the 2024-25 season.
Lawyers for each league raised their concerns during a status conference in bankruptcy court on Tuesday, after Diamond said it was delaying its hearing to confirm its reorganization plan from mid-June until late July.
“I want to reiterate why timing is so critical for the NBA. The start of the 2024-2025 season is fast approaching,” said NBA attorney Vincent Indelicato in court on Tuesday. “A lot needs to get done well ahead of the season to properly produce and distribute games.”
The NHL attorney voiced similar fears, indicating if Diamond Sports is unable to craft a viable business plan in the coming months, the leagues may be left scrambling to find options to produce and air games in local markets. Some Major League Baseball teams have already forged ahead without their Bally Sports network.
Meanwhile, numerous NBA and NHL teams have reached deals with local broadcast station groups to carry local games.
Diamond Sports must put together a reorganization plan, outlining its future outside of bankruptcy protection, and receive court approval to move forward with it. The approval paves the way for a company to exit bankruptcy protection.
The NBA has pushed for Diamond Sports to have “a very clear business plan no later than July,” Indelicato said Tuesday.
For Diamond, it has been a long road to formulate a reorganization plan filled with various negotiations — with lenders to restructure its hefty debt load, with the leagues and teams for streaming TV rights and with pay-TV distributors that carry the games.
The recent breakdown of negotiations between Diamond Sports and Comcast Corp. threw a wrench in the sports network operator’s progress, its attorneys said Tuesday.
Last month, Comcast customers lost access to Bally Sports networks, which affected fans of 11 MLB teams. The carriage blackout has not caused an issue yet for NBA and NHL fans, however, since the leagues are each in the postseason. Regional sports networks air regular season local games.
The Diamond Sports attorney said Tuesday the company is still in negotiations with various stakeholders, but it reached an impasse with Comcast, giving it little choice but “to explore alternatives.”
Distributors such as Comcast have been losing pay-TV customers at a fast clip in recent years as people opt for streaming alternatives, and the regional sports networks are among the most-affected channels. On top of this, Diamond Sports had a more than $8 billion debt load stemming from Sinclair‘s acquisition of the networks in 2019.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
Source: Business - cnbc.com
