Diamond Sports Group has quietly renewed its local streaming deal with the NBA, an agreement that will keep 16 pro hoops teams’ games on the Bally Sports Plus streaming service through the 2024-25 season.
According to Sports Business Journal, citing unnamed sources, the NBA’s deal with Diamond, Sinclair Broadcast Group's regional sports network subsidiary, renews annually in one-year increments if 13 conditions are meant.
Despite what appears to be Diamond's imminent entry into bankruptcy in mid-March, SBJ said that Sinclair's RSN operating unit met all 13 conditions — including one that requires the subsidiary to pay all participating NBA franchises their streaming rights fees on time.
If Diamond lapses on any of the required conditions, the NBA can pull streaming rights and license them to another company.
Notably, Diamond will breach one of the conditions if it files for bankruptcy next month, as expected.
As SBJ noted, the NBA — like the other leagues tied up in the Bally Sports mess, Major League Baseball and the National Hockey League — face a complicated calculus.
Pulling digital rights next month could further cascade cash shortages for Diamond's operations, affecting the core linear regional sports network business.
Stabilizing Diamond, at least through the end of the next NBA season, might make more sense.
The NBA's national broadcast deals with Disney/ESPN and Warner Bros. Discovery expire at the end of the 2024-25 campaign, and local streaming rights could be tied into a new national rights mega-deal.
Certainly, Sinclair has led the pro-sports business into what has become the worst media rights crisis ever.
Sinclair purchased 19 Fox Sports RSNs in 2019 for $10.6 billion, then preceded to embark on two expensive stock buybacks.
Diamond still has most of that debt to deal with, but recently the amount of cash it has on hand to keep paying not only the NBA, but 14 Major League Baseball teams and 12 National Hockey League franchises for their local TV and streaming rights, has come into question.
Earlier this week, Diamond announced that it won't pay a $140 million all-interest payment on its debt — a decision that will likely lead to a bankruptcy filing in mid-March.
On Wednesday, addressing MLB beat writers to kick off baseball’s spring training in Phoenix, Arizona, MLB commissioner Rob Manfred said he’s hopeful a resolution to keep Bally Sports operating can be carved out. However, should Diamond stop paying any of the 14 pro baseball clubs for their TV rights, the MLB is prepared to step in, terminate the RSN deals and get the teams on TV in another way.
All three of the sports leagues would face an austere challenge if they had to immediately replace RSN revenue with new broadcast and streaming rights deals on a short timeline.
So working with Sinclair and Diamond on a solution would seem to benefit everyone.
Sinclair has reportedly pitched a restructuring plan in which it would retain only around 5% of Diamond, with creditors receiving around $9 billion in debt as equity and taking majority ownership.
Sinclair CEO Chris Ripley would give up his seat on the Diamond board to the new ownership group.
The leagues would have to approve this arrangement. ▪️
