Bankrupt Diamond Sports may cut ties with all MLB teams but one
By Dietrich Knauth
Oct 2 (Reuters) -Regional sports broadcaster Diamond Sports Group said Wednesday that it will likely cut ties with all Major League Baseball teams other than the Atlanta Braves in an attempt to complete a bankruptcy restructuring by the end of the year.
The company's decision could leave about a dozen baseball teams scrambling to reach new broadcast agreements before the 2025 season begins in late March.
Diamond Sports is attempting to negotiate new deals with those teams, but it filed a new bankruptcy plan Wednesday that would end most of its remaining MLB contracts.
"The amended plan now puts the decision in the clubs' hands," Diamond attorney Andrew Goldman said at a bankruptcy court hearing in Houston, Texas. "If they can't reach an agreement with us, they can go ahead and make other plans for broadcast for next season."
Diamond entered bankruptcy with contracts to broadcast regular-season games for 14 baseball teams, but it has said those agreements are no longer profitable. Diamond has sought to renegotiate those deals to reduce the amount that it pays MLB teams and gain more rights to stream games online to fans.
MLB's attorney, James Bromley, told U.S. Bankruptcy Judge Chris Lopez that MLB teams had been "sandbagged" by the announcement that Diamond intended to keep its contract with just the Atlanta Braves.
"At least some of our clubs are being left out in the cold once again," Bromley said at the hearing.
The baseball teams that could be forced to find new broadcast arrangements are the Tampa Bay Rays, the Detroit Tigers, Miami Marlins, Cincinnati Reds, Kansas City Royals, Los Angeles Angels, St. Louis Cardinals and Milwaukee Brewers.
Diamond canceled its contracts with two teams in the midst of the 2024 baseball season, and it truncated its contracts with three others so that those deals terminated at the end of the just-concluded 2024 baseball season. Diamond Sports' contracts do not include the television rights to MLB playoff games, which are instead broadcast on national TV channels like Fox, ESPN, and TBS.
Goldman said that Diamond's new bankruptcy plan was an important step forward, building on previous agreements with the National Basketball Association and National Hockey League, major cable distributors, its owner Sinclair, and creditors who are owed over $8 billion.
The company is also close to a new naming rights agreement and in discussions with potential streaming rights partners including Amazon.com, which had previously offered to take a partial ownership stake in the company.
The bankruptcy plan includes a liquidation option that could shutter the company in 2025 if the company cannot complete its restructuring by the end of this year. That option would ensure that Diamond could continue to broadcast hockey and basketball games for the next season even in a worst-case scenario, according to court filings.
Diamond filed for bankruptcy in March 2023, caught between its expensive legacy contracts with sports teams and a decline in revenue from cable TV due to sports' viewers cable-cutting.
Before its bankruptcy filing, Diamond broadcast about 40% of regular-season baseball, hockey and basketball games in the U.S. through its Bally Sports-branded television channels.
In Re Diamond Sports Group LLC, U.S. Bankruptcy Court for the Southern District of Texas, No. 23-90116
For Diamond Sports Group: Andrew Goldman of WilmerHale; Brian Hermann of Paul, Weiss, Rifkind, Wharton & Garrison; John Higgins of Porter Hedges.
For MLB and its teams: James Bromley and Alexa Kranzley of Sullivan & Cromwell.
Read more:
Broadcaster says MLB streaming dispute pushed it toward bankruptcy
Broadcaster Diamond Sports Group files for bankruptcy protection
Sports leagues question whether broadcaster Diamond can survive without Comcast
Reporting by Dietrich Knauth
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