Sinclair Broadcast Group’s regional sports subsidiary Diamond Sports has filed a lawsuit against the holding parent company of the Phoenix Suns basketball team over the sports organization’s decision to move its games to free broadcast TV later this year.
The lawsuit makes good on a threat issued by Diamond Sports late last week after the Phoenix Suns and Gray Television announced a deal to distribute the basketball team’s regular-season games on Phoenix station KTVK (Channel 3), the newly-formed Arizona’s Family Sports and Entertainment Network and a yet-to-launch subscription streaming service.
The deal covers the Phoenix Suns, which is part of the National Basketball Association (NBA), as well as the Women’s National Basketball Association (WNBA) team Phoenix Mercury. Games played by both teams were previously aired on Bally Sports Arizona, a regional channel owned by Diamond Sports.
Diamond Sports filed for Chapter 11 bankruptcy protection in March in order to address around $8 billion of debt. Throughout the process, Diamond Sports has continued to air games played by major professional sports organizations, including the Phoenix Suns.
Last week, Diamond Sports said the deal between the Phoenix Suns and Gray Television “breached our contract and violated bankruptcy law, and Diamond Sports Group will pursue all remedies against any parties that attempt to exercise control over our property interests while we reorganize.”
Now, Diamond Sports has gone through with its threat, filing a lawsuit against the teams, Gray Television and streaming app developer Kiswe Mobile in the same federal jurisdiction where its Chapter 11 bankruptcy case is being reviewed.
The lawsuit claims Diamond Sports is the “sole and exclusive holder” of telecast rights to the Suns and Mercury games, and that the company was involved in negotiating a new carriage agreement for the games as recently as last October.
“The Suns recently made a final written offer to [Diamond Sports] on October 14, 2022; while declining that offer, [Diamond Sports] made clear its desire to continue negotiating an extension of the deal,” attorneys for Diamond Sports wrote in a complaint filed on Wednesday.
Diamond Sports said it wasn’t given an opportunity to properly evaluate the proposal Gray Television and Kiswe made to the Phoenix Suns for telecast rights, even though its original contract had a “right of first refusal” clause. (It wasn’t clear if that provision was still in play, since Diamond Sports admitted it turned down an offer from the Suns last October.)
“[Diamond Sports] was given barely any notice at all, let alone an opportunity to evaluate or accept Gray and Kiswe’s replacement offer as required, before the Suns, Gray and Kiswe announced the replacement agreement with the Suns, in clear disregard of the agreement,” the complaint continued.
In addition to the lawsuit, Diamond Sports said it was preparing to file an emergency motion in federal court that would “compel the Suns to perform” under the terms of its original agreement. Officials at the Suns, Gray Television and Kiswe have not yet publicly commented on the matter.
