Bloomberg News is reporting that the Diamond Sports Group is planning to miss a $140 million payment on its debts in mid-February and that the Sinclair-backed company is planning to file for bankruptcy, which would allow the regional sports network operator to restructure its massive $8.6 billion debts.
“The outcome will have serious implications for the $55 billion world of sports-media rights: the company’s channels showcase Major League Baseball, National Basketball Association and National Hockey League games to fans from Detroit and Phoenix to San Diego,” the article noted.
The article cites people with knowledge of the matter, who declined to be identified citing the private nature of the talks.
Sinclair declined to comment in response a TV Tech request for a statement on the report.
If the bankruptcy filing proceeds in a typical fashion, the bankruptcy restructuring would most likely turn the holders of Diamon’s debt into owners. Bloomberg reported that Diamond expects to emerge from any restructuring by May or June, one person said. At that point, its largest owners would include Prudential Financial, Fidelity, Hein Park Capital Management and Mudrick Capital Management, according to multiple people.
Another alternative would be for the teams to acquire ownership stakes or to take back the media rights.
The possible bankruptcy filing stems from ongoing woes in the regional sports business. Faced with massive video sub losses, pay TV providers have dropped or worked to limit their carriage of these expensive services, which in turn has cut into the carriage fees Diamond’s Bally Sports Networks had hoped to receive when the company was acquired by Sinclair.
To compensate for that, Bally launched direct-to-consumer services last year but those businesses will take time to build.
