Making perhaps its harshest rebuke yet of the cash-strapped regional sports network that still controls local TV rights to 12 of its clubs, Major League Baseball told a Houston bankruptcy court Wednesday that Bally Sports network operator Diamond Sports Group should not be granted another extension to come up with a Chapter 11 restructuring plan.
Noting that Diamond’s cash on hand has dwindled nearly 90% to just under $22 million since it entered bankruptcy in mid-March, the league said, in a joint filing with five individual clubs under the Bally umbrella, that the Sinclair Broadcast Group subsidiary has “made no progress toward reorganization and no progress in negotiations with their creditors.”
"The Debtors had the entirety of the 2023 baseball season to get their business back in order and have failed to do so," the MLB objection filing added. "There is no reason to believe that the Debtors will finally figure out a path forward now that the NBA and NHL seasons are beginning. The Debtors should not be permitted to exploit the protection of exclusivity and the presumption of legitimacy it provides to simply stall for even more time while the entire cycle of sports seasons starts again."
Diamond, a subsidiary set up by Sinclair to manage its Bally Sports RSNs, either needs to move forward with a restructuring plan or “make the hard decision to liquidate,” MLB and its teams added.
Also read: Bankrupt Diamond Officially Announces Bally Sports Schedules For the NHL's Panthers and Lightning
MLB and the teams also said that they can no longer tolerate the uncertainty associated with Diamond’s ability to gradually reject team contracts over time as it slowly works its way through its vastly complicated restructuring process.
Diamond responded with this statement on Thursday morning: “Diamond disputes MLB's misguided attempt to oppose a customary extension in a complex, multi-billion-dollar restructuring involving myriad stakeholders, with whom Diamond is making significant progress. Diamond is current in its rights payments and has satisfied its broadcasting obligations to all MLB teams under contract for the now concluded 2023 MLB regular season.”
The objection comes a week after Diamond filed for a second extension to submit a restructuring plan to creditors. The subsidiary is asking for a November 29 deadline to file the plan, which would give creditors until January 29 to approve it.
Major League Baseball commissioner Rob Manfred has been one of Diamond and Sinclair’s harshest critics dating back to 2019, when Sinclair outbid MLB for 19 Fox Sports Net channels, paying $10.6 billion for them.
Wednesday’s objection was made by MLB, along with the Atlanta Braves, Cleveland Guardians, Detroit Tigers, Milwaukee Brewers and Texas Rangers.
