The New York Post reports that Sinclair Broadcast Group has offered to pay "roughly" $850 million to buy back its former regional sports networks subsidiary, Diamond Sports Group, which is currently circling the drain of liquidation in a Texas bankruptcy court.
The buyout would come in partnership with Bally's Corp. owner Soo Kim, the Post said.
According to the News Corp.-owned paper, Diamond's junior creditors -- who need around $8 billion to get whole again -- would recoup around $4 cents on the dollar, and Diamond is currently valued only at around 2 cents on the dollar.
A Sinclair rep had no comment for Next TV when we reached out late Thursday afternoon for confirmation and statement.
Bankrupt Diamond Sports Group is suing Sinclair or $1.5 billion, claiming the broadcast station group extracted management service fees and dividends from the subsidiary, even though it knew it was insolvent.
Dismissal of that suit would be part of the $850 million purchase, the Post said.
An individual involved in Diamond's restructuring process told Next TV that he wasn't aware of a Sinclair buyback bid being pitched to the subsidiary's creditors, but that the concept could have been floated to "avoid the $1.5 billion clawback."
The source confirmed the Post's report that "several interested parties" besides Sinclair have expressed interest in buying Diamond, which manages the 17 remaining Bally Sports channels. Leaking news of a bid, he said, could be Sinclair's way of pushing these potential bidders into actually rendering a real offer.
It could also be a means, he said, of pushing the NBA along, as Diamond uses Chapter 11 leverage to try to reduce the amount of fees it pays to license local TV rights from NBA teams.
Certainly, the walls are closing in on Diamond and Bally Sports.
Diamond first entered bankruptcy way back in mid-March, looking to restructure more than $8 billion in debt taken on when its former parent company, Sinclair, paid $10.6 billion to acquire 19 Fox SportsNet RSNs back in 2019. And at the end of September, it asked for yet another extension -- until Nov. 29 -- to present a restructuring plan to creditors.
But both Diamond's creditors and its league constituents have lost patience. In an Oct. 21 objection to the subsidiary's extension request, Major League Baseball said the subsidiary has had enough time to figure out a new business plan, and it was time to either move forward or liquidate.
