Diamond Sports Group, which owns Bally Sports, is expected to file for bankruptcy protection by Friday, March 17, 2023. This filing affects broadcast rights for 19 regional sports networks which include the Columbus Blue Jackets, Cincinnati Reds, Cleveland Cavaliers and Cleveland Guardians.
What happens?
Don’t expect big changes when Diamond files for bankruptcy. By all accounts, the Bally Sports-branded channels will continue producing and carrying games. Diamond executives have told most of the teams and leagues that it will continue paying its rights fees, even while in bankruptcy.
Diamond released the following statement: “We’ve been making our rights payments to teams with the exception of the Diamondbacks, where we have exercised a contractual grace period in order to maximize flexibility, especially given that we do not have DTC rights. We are continuing to broadcast games and are operating our business as usual.”
How does Diamond stand with its distributors?
One of the biggest issues Diamond faces is that it must renegotiate four of its biggest distribution deals within the next 12 months, according to several sources. Diamond’s current deals with Comcast and DirecTV expire in the fall of 2023.
What about the NBA and NHL? Are their teams at risk?
NBA executives have been working with Diamond to figure out a plan to move forward. The NBA wants to make sure that its teams continue to receive their local rights fees payments for, at least, the next two years when the league goes to market with its national rights. It’s in the NBA’s best financial interest to try to keep Diamond afloat until that time. The NHL also is working with Diamond to reach a solution.
At the end of 2021, the NHL was the first league to cut a digital rights deal with Diamond, and sources say the league is looking to accommodate the company. Of all the leagues, the NHL is, perhaps, in the best position in the unlikely event that Diamond fails to carry its games. The NHL already has a deal that allows ESPN to carry the league’s out-of-market games on ESPN+. The league could fashion a deal that would give ESPN the in-market rights, too.
