Taking back Bally Sports’ local TV rights to teams’ games is one of the options being explored by Major League Baseball, according to a published report.
Diamond Sports Group, the Sinclair Broadcast Group division that runs the Bally Sports-branded regional sports networks, is considering filing for bankruptcy as a payment on its debt approaches.
Sinclair took on about $9 billion in debt when it bought the 19 Fox regional sports networks from The Walt Disney Co. in 2019. Since then, cord cutting has eroded the RSNs subscriber base and rights costs have risen, putting the RSNs in a bind.
In a bankruptcy, Diamond might be able to try to relieve itself of some payments and renegotiate contracts. All of which has Major League Baseball looking at contingency plans, according to Front Office Sports.
“Our strong preference would be for the RSNs to be able to fulfill the agreements they signed with the clubs. However, we need to be prepared if the RSNs are unable to do so,” Noah Garden, MLB chief revenue officer, said in a statement to Front Office Sports. “This is a situation we have been monitoring for a long time. We have been contingency planning to ensure that no matter what happens with the RSNs, fans will be able to continue watching their favorite teams in their local market.”
During its third-quarter earnings report in November, Sinclair said that it hired advisers LionTree and Moelis & Co. to “talk to parties about deleveraging, strategic partnerships and things of that nature.”
According to a report from Bloomberg, under a restructuring plan described by unnamed inside sources, debt would be turned into equity, and Diamond's largest creditors — Prudential Financial, Fidelity, Hein Park Capital Management and Mudrick Capital Management — would become owners of the Bally Sports RSNs. ■
