Making a major step toward a long-awaited restructuring plan, bankrupt Diamond Sports Group said that it has reached an agreement with the NBA to keep all 13 of the league's teams contracted with Bally Sports on the regional sports network through the 2023-24 season.
After this season, Diamond will relinquish linear regional-sports-network and direct-to-consumer rights early for all 13 teams, with the league fully in control of them. The league then can either renegotiate new terms with the restructured Diamond, perhaps under new ownership at that time, or the NBA could move in another direction with the local TV rights.
The NBA's 13 Bally Sports-signatory teams will have the option of presenting up to 10 of their games on local broadcast stations this current season. According to Sports Business Journal's John Ourand, the NBA teams will also be able to cut themselves loose from Bally Sports should Diamond be unable to agree to carriage renewal terms with Charter Communications and its 15 million pay TV homes in February, when the current deal expires.
Also read: Sinclair Is Reportedly Offering $850 Million to Buy Back Diamond Sports Group Out of Bankruptcy
In exchange, Diamond will receive an undisclosed reduction in its rights burden for this current season that it says will enable it to continue operating. Also according to Ourand, the haircut will amount to 16% of the teams' previously contracted rates.
The deal was revealed in a "cooperation agreement" filed Monday in the Houston bankruptcy court overseeing Diamond's lengthy, contentious and convoluted restructuring.
According to the cooperation agreement, a similar deal is "pending" with the National Hockey League. Diamond also said it's negotiating with Major League Baseball to move forward with 10 of the 12 teams that currently remain under the Bally Sports RSN umbrella.
Earlier, Diamond said it carved out a short-term agreement with Comcast to keep its channels on the No. 1 U.S. pay TV operator's video platform for another year.
“Our newly-signed agreements with the NBA, Comcast and our creditors reflect significant progress on Diamond’s path forward," Diamond said in a statement. "Upon court approval, these agreements will enable Diamond to continue delivering live game broadcasts to fans throughout the 2023-24 NBA, NHL and MLB seasons. Diamond has been broadcasting NBA and NHL games and will continue to do so while the Court considers our motions, and while discussions with the NHL finalize with respect to their own new deal.”
Pending approval by its creditors, Diamond described the cooperation agreement as an important precursor to its long-gestating restructuring plan, which the bankrupt former Sinclair Broadcast Group subsidiary has delayed filing several times as it works through a complex web of negotiations with banks, pro leagues, individual teams and pay TV operators.
Perhaps more than anything, the NBA agreement indicates that Diamond has bought itself some time.
"I'm pretty sure you can expect Ballys to carry on and find a buyer or buyers, and maybe even continue on in some fashion," a source close to Diamond's negotiations told Next TV.
Diamond still faces hurdles, with renewal still pending with No. 2 U.S. pay TV operator, Charter. But the cooperation agreement, Diamond said, provided something much needed in its eight-month restructuring process.
"Many of the debtors’ counterparties, including MLB, DirecTV and Sinclair, have expressed the need for clarity regarding the debtors’ continued operations, and the cooperation agreement provides that clarity," Diamond said in Monday filing.
Meanwhile, in its lengthy filing, Diamond also said it would give up its minority stakes in the YES Network and Marquee Sports Network, respective RSN homes of the New York Yankees and Chicago Cubs.
