Sinclair's bankrupt Diamond Sports Group has dropped a court objection to a distribution agreement reached in April between broadcaster Gray Television and the Phoenix Suns, as well as the NBA franchise's WBNA sibling, the Phoenix Mercury.
“I am excited to be able to deliver to our Suns and Mercury fans this industry-shifting partnership with Gray Television," the teams' owner, Mat Ishbia, said in a statement provided to Sports Business Journal. "This deal gives more than 2.8 million homes across Arizona access to Suns and Mercury games for free.”
The Suns and Mercury had expiring TV rights deals with Diamond to show their games in their local area on regional sports network Bally Sports Arizona. The teams signed a deal with Gray in late April to move their games back to free over-the-air broadcast TV.
Diamond was able to convince the court overseeing its bankruptcy to block the deal, temporarily, based on a clause in its contract with the teams giving it the right to match or exceed any outside offer for renewal.
According to the Sports Business Journal, it was ultimately concluded that in a declining pay TV market, Bally Sports Arizona's reach couldn't match the 2.8 million homes the Gray TV deal promises to deliver.
Pundits believe the Suns/Mercury deal could be a trend-setter, with the NBA's Utah Jazz also leaving the RSN business to return to broadcast TV.
Diamond's capitulation, meanwhile, could also be an indicator that the subsidiary will also cut loose Major League Baseball's Arizona Diamondbacks from the team's Bally Sports Arizona contract. (Wouldn't pay TV operators demand to renegotiate their carriage deals after a major tenant like the Suns leaves the channel?)
Diamond is using the leverage provided by Chapter 11 to negotiate the Diamondbacks down from their $75-million-a-season licensing rate, plus give up their DTC streaming rights at no additional cost.
As reported earlier this week by the New York Post, Major League Baseball Commissioner Rob Manfred is pushing back on that deal.
And as Next TV reported late Thursday evening, the league is working with pay TV operators, including DirecTV, to set up a new channel for the Diamondbacks. For its part, DirecTV petitioned the Houston bankruptcy court, trying to ensure that if it launches a new Diamondbacks channel, it won't also be on the hook to pay licensing fees on a bereft Bally Sports Arizona.
We'll know soon if Diamond and the Diamondbacks can agree -- they're set to report their negotiating status to Judge Chris Lopez in Houston on Monday.
Should the Suns, Mercury and Diamondbacks all flee Bally Sports Arizona, the only remaining tenant would be the NHL's Phoenix Coyotes. And entire RSN floated to a desert community on pro hockey. Let's see how that skates.
