Regional sports broadcast Diamond Sports won approval from a federal court for its plan of reorganization on Thursday, which clears a path for the company to emerge from its Chapter 11 bankruptcy case.
As part of the plan, Diamond Sports will be able to reduce its debt load from $9 billion to a more-manageable $200 million, the company said in a statement. After the restructuring concludes, Diamond Sports said it will operate as a “well-capitalized” firm, with “$100 million in cash and cash equivalents on its balance sheet.”
The reorganization plan calls for several creditors to swap their debt bonds in exchange for equity in the new company. Those creditors include funds managed by PGIM, Hein Park Capital Management, Discovery Capital Management, Hudson Bay Capital Management, and Alta Fundamental Advisors.
Formed as a joint venture between Sinclair and Allen Media, Diamond Sports operates around two dozen regional sports networks that recently rebranded to FanDuel Sports Network. The channels were acquired from the Walt Disney Company in 2019, the byproduct of a regulatory condition connected to Disney’s acquisition of certain film and television assets from 21st Century Fox.
Under its prior branding as Bally Sports, the company offered a robust slate of live baseball, hockey and basketball events, along with some niche sports and shoulder programming. The bankruptcy case allowed Diamond Sports to end some of its telecast agreements, most of which affected teams affiliated with Major League Baseball (MLB) and the National Basketball Association (NBA).
On Thursday, Diamond Sports said it will retain the rights to games played by 13 NBA, 8 National Hockey League (NHL) and 6 MLB teams for the foreseeable future, including:
- Atlanta Braves (MLB)
- Atlanta Hawkes (NBA)
- Carolina Hurricanes (NHL)
- Charlotte Hornets (NBA)
- Cleveland Cavaliers (NBA)
- Columbus Blue Jackets (NHL)
- Detroit Pistons (NBA)
- Detroit Red Wings (NHL)
- Detroit Tigers (MLB)
- Indiana Pacers (NBA)
- Los Angeles Angels (MLB)
- Los Angeles Clippers (NBA)
- Los Angeles Kings (NHL)
- Memphis Grizzlies (NBA)
- Miami Marlins (MLB)
- Milwaukee Bucks (NBA)
- Minnesota Timberwolves (NBA)
- Minnesota Wild (NHL)
- Nashville Predators (NHL)
- Oklahoma City Thunder (NBA)
- Orlando Magic (NBA)
- San Antonio Spurs (NBA)
- St. Louis Blues (NHL)
- St. Louis Cardinals (MLB)
- Tampa Bay Lightning (NHL)
- Tampa Bay Rays (MLB)
Some of the teams mentioned have forged local distribution agreements with other broadcasters and launched alternative ways to bring their games to sports fans, including through their own streaming services, during the bankruptcy process. For instance, the Los Angeles Clippers now offers locally-televised games via KTLA (Channel 5, CW Network) and its own streaming service, ClipperVision. It wasn’t clear from the announcement released by Diamond Sports on Thursday if it will share local telecast rights to games offered by other broadcasters and streaming services, or if it will reclaim those rights in the future.
After it restructures, Diamond Sports intends to maintain its executive leadership, including CEO David Preschlack, CFO and COO David DeVoe Jr., and Business Development and Distribution President Eric Ratchman. The board of directors will add new members post-bankruptcy.
“Today is a landmark day for Diamond, as we embark on a new path for our business,” Preschlack said in a statement. “Diamond is now unencumbered by legacy debt, financially stable and enthusiastically supported by new ownership. Over the last eighteen months, we have worked tirelessly to strengthen our business, including by reaching revised multi-year rights agreements with team and league partners, go-forward carriage agreements with major distribution partners, a broad naming rights partnership with FanDuel and a commercial agreement with Amazon. These critical achievements and a realigned business are enabling us to emerge as a sustainable, go-forward entity that drives value for our partners and fans.”
Preschlack said Diamond Sports “is well-positioned to further enhance its product offering and remains committed to delivering the highest quality live sports content in-market to fans through both linear and direct-to-consumer frameworks.”
