SOUTHPORT, Conn.—A U.S. bankruptcy court has approved Diamond Sports Group’s reorganization plan, paving the way for the troubled regional sports network owner to emerge from Chapter 11 protection. Diamond expects to complete the restructuring process in the coming weeks.
The ruling in the U.S. Bankruptcy Court for the Southern District of Texas ends a long-running saga that highlighted the massive impact of cord-cutting on RSNs. After Sinclair paid $10.6 billion for the 21 former Fox Sports Net RSNs in 2019 and set up Diamond as a subsidiary, cord-cutting and a declining pay TV business pushed the group into Chapter 11 in March 2022.
Under the terms of the plan, Diamond will complete a comprehensive balance sheet restructuring that will reduce its debt from almost $9 billion to $200 million. On completion, Diamond will be capitalized with more than $100 million in cash and cash equivalents on its balance sheet.
Upon emergence, Diamond’s lead creditors—funds managed by or affiliated with PGIM, Inc., Hein Park Capital Management LP, Discovery Capital Management, Hudson Bay Capital Management LP and Alta Fundamental Advisors LLC—will exchange certain funded debt claims for equity in the reorganized company.
Sinclair’s equity interests in Diamond will be canceled.
Diamond will operate as a standalone entity, having completed its operational separation from Sinclair.
The new owners hope a streaming deal with Amazon's Prime Video, a naming rights agreement with FanDuel that saw the RSNs rebranded as FanDuel Network and rights to 27 MLB, NHL and NBA teams will be enough for the operations to prosper.
When it comes out of Chapter 11, Diamond will be home to 13 NBA teams, 8 NHL teams and 6 MLB teams, including:
- NBA: Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Detroit Pistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, Oklahoma City Thunder, Orlando Magic and San Antonio Spurs.
- NHL: Carolina Hurricanes, Columbus Blue Jackets, Detroit Red Wings, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues and Tampa Bay Lightning.
- MLB: Atlanta Braves, Los Angeles Angels, Miami Marlins, St. Louis Cardinals, Detroit Tigers and Tampa Bay Rays.
Following Diamond’s completion of the restructuring process, David Preschlack, CEO; Eric Ratchman, president of distribution and business development; and David DeVoe Jr., chief operating officer and chief financial officer will remain in their respective roles. Diamond’s Board will include new members after emergence from bankruptcy.
“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,” Preschlack said. “Over the last 18 months, we have worked tirelessly to strengthen our business, including by reaching revised multiyear rights agreements with team and league partners, go-forward carriage agreements with major distribution partners, a broad naming rights partnership with FanDuel and a commercial agreement with Amazon. These critical achievements and a realigned business are enabling us to emerge as a sustainable, go-forward entity that drives value for our partners and fans.”
Preschlack continued: “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. I want to express my gratitude to the hardworking Diamond Sports Group employees for their unwavering support, dedication and continued confidence throughout this transformative period. Together, we are excited to build a bright future for Diamond and our stakeholders.”
Additional information regarding Diamond’s Chapter 11 proceeding, including court filings and information about the claims process are available here.
