As the sports media world awaits which Major League Baseball team bankrupt Sinclair subsidiary Diamond Sports Group cuts loose next from its regional sport network contract, the Houston bankruptcy court overseeing Diamond's restructuring spat out a surprise Bally Sports refugee Wednesday: Atlantic Coast Conference football and basketball games.
Turns out Diamond has (had) a contract with Raycom, now reduced to a sports production unit of Gray Television, to show packages of ACC college football, as wel as men's and women's basketball.
Apparently, Raycom told Diamond even before the subsidiary entered Chapter 11 in March that it wanted out of its Bally Sports contract. Diamond apparently agreed and stopped paying Raycom.
On Wednesday, Diamond's lawyers filed a motion signaling an official rejection of the ACC contract.
Unlike the awkwardly hostile language between Major League Baseball and Sinclair/Diamond, the separation with Raycom sounds amicable.
"Recently, Raycom requested that the Debtors promptly reject the Raycom Agreement so that Raycom could initiate the process of seeking a new partner for broadcasting future ACC events," reads the court motion. "The parties’ respective counsel have worked closely with one another in preparing this motion, and Raycom supports the relief requested in this motion."
This was no tiny sports rights asset for the Bally Sports RSN business.
Bally Sports presented 43 ACC men's games and 25 women's basketball games during this past 2022-23 season. This included ACC contests featuring the Miami Hurricanes, a March Madness Final Four team last season.
Bally Sports also picked up ACC football games in recent years that weren't shown by national networks like ESPN, such as this one between Miami and Virginia last season.
Diamond is in bankruptcy trying to shed around $8 billion in debt, with Sinclair gravely miscalculating the severity and impact of future cord-cutting when it paid $10.6 billion for 19 Fox SportsNet channels back in 2019 ... then blithely chose to embark on several campaigns of stock buybacks instead of paying down this debt.
Three years later, with many Bally Sports rights deals seeing their margins whittled from ~50% to ~15% and less, Diamond wants to trade equity for debt relief, as well as get out or renegotiate onerous contracts on which it's losing money.
On Thursday, Diamond has a hard deadline to either pay the Texas Rangers the MLB teams local TV rights check for the 2023 season, or let the team walk away from Bally Sports. According to this Dallas Morning News report Wednesday, Diamond will likely pay the Rangers its money.
