The largest owner of regional sports networks filed for Chapter 11 bankruptcy protection after the company missed a $140 million payment on its more than $8 billion debt load.
Diamond Sports — an independently operated unit of Sinclair Broadcast Group that holds broadcasting rights to 42 professional teams — said Tuesday it is finalizing a restructuring support agreement with a majority of its debt holders and Sinclair to clear its debt load, CNBC reported.
The Post reported exclusively on Monday that Diamond is expected to use the bankruptcy proceedings to terminate the contracts of at least four MLB teams as the company pays more rights fees to them than it collects back through cable contracts and ads.
However, Diamond said it will not suspend local broadcast service of 19 networks under the Bally Sports brand across the country, which includes coverage of professional hockey, basketball, and baseball games.
“DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love,” Diamond Sports CEO David Preschlack said. “We look forward to working constructively with our team and league partners and all DSG stakeholders throughout this process and beyond.”
Major League Baseball, which begins its season on March 30, said Diamond’s bankruptcy filing is an unfortunate, but expected development.
“Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process,” an MLB spokesperson said.
Diamond’s roughly $8.67 billion debt stems from when Sinclair Broadcast Group paid $10.6 billion to purchase the company from Disney in a highly leveraged buyout in 2019.
Under the restructuring support agreement, Diamond’s primary lenders will not be impacted, while secured and unsecured creditors will exchange their debt for equity and warrants issued by the reorganized company.
Diamond has been hampered by the accelerated rate of cord-cutting among cable subscribers in recent years, which has hurt the regional sports networks.
Warner Bros. Discovery is reportedly looking to get out of the regional sports networks business, The Wall Street Journal reported.
With Post wires