Sinclair Broadcast Group’s Diamond Sports Group said it has paid all of its Bally Sports pro team partners their TV rights fees on time, except for Major League Baseball's Arizona Diamondbacks.
In a statement provided first to Sports Business Journal, Diamond said that for the Diamondbacks specifically, the media company has “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.”
Also read: It's On: Bally Sports RSNs Headed for Bankruptcy
Diamond’s dealings with MLB’s Arizona franchise represent the visible portion of an iceberg, with the media company said to be feverishly re-negotiating with its banks, pro sports leagues including the MLB, NBA and NHL, and their individual teams, trying to come up with a restructuring plan.
Diamond Sports Group is expected to formally enter the bankruptcy process in about a week, or as soon as next Thursday, March 16. The grace period for Diamond to pay the Diamondbacks ends at 11:59 p.m. on that day.
Also, the 30-day grace period on the $140 million all-interest debt payment that Diamond skipped back on Feb. 15 ends, too.
Diamond Sports Group is the management subsidiary Sinclair set up after it acquired a collection of 19 regional sports networks from Fox for $10.6 billion in 2019 and rebranded them as Bally Sports.
At the time, margins on the erstwhile Fox Sports RSNs were said to be in the 50% range, but cord-cutting has eaten into profitability for them dramatically. And Sinclair and Diamond's attempt to recoup additional revenue via a Bally Sports Plus direct-to-consumer streaming product hasn't come close to fixing the economics.
Sinclair and Diamond, which are $9 billion in debt over the Bally Sports venture, want to restructure their deals.
Diamond is contracted to pay what is said to be a particularly team-favorable yearly RSN rights fee to the Diamondbacks through 2035. And the Diamondbacks were not among the five MLB teams that surrendered their streaming rights for Bally Sports Plus last summer.
Speaking in Arizona to kick off Spring Training last month, MLB commissioner Rob Manfred said his league was ready to step in and take over TV broadcasts for teams should Diamond miss their RSN rights payments to them.
However, it’s expected that the leagues, including Major League Baseball, will keep their games on Bally Sports through the season as the business is restructured, its debt converted to equity in the enterprise. ■
