Bally Sports files for Chapter 11 bankruptcy, 16 NBA teams affected

Diamond Sports Group, the largest owner of regional sportsnetworks, filed for Chapter 11 bankruptcy protection on Tuesday.The move came after it missed a $140 million interest payment lastmonth.

Diamond owns 19 networks under the Bally Sports banner. Thosenetworks have the rights to 42 professional teams — 14 baseball, 16NBA and 12 NHL.

(Editor's Note: Those NBA teams are the Atlanta Hawks,Charlotte Hornets, Cleveland Cavaliers, Dallas Mavericks, DetroitPistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies,Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, New OrleansPelicans, Oklahoma City Thunder, Orlando Magic, Phoenix Suns andSan Antonio Spurs.)

The company said in a release Tuesday night that it expects tocontinue to operate during the bankruptcy process and that coverageof games should not be affected.

Diamond Sports also said it is negotiating a restructuringagreement with debt holders that will eliminate most of its debt.Under an agreement with creditors, it would become a separatecompany from Sinclair Broadcast Group.

“DSG will continue broadcasting games and connecting fans acrossthe country with the sports and teams they love,” Diamond SportsCEO David Preschlack said in a statement. “We look forward toworking constructively with our team and league partners and allDSG stakeholders throughout this process and beyond.”

Diamond said in a financial filing last fall it had debt of$8.67 billion. The bankruptcy filing was made in the SouthernDistrict of Texas.

Sinclair Broadcast Group bought the regional sports networksfrom The Walt Disney Co. for nearly $10 billion in 2019. Disney wasrequired by the Department of Justice to sell the networks for itsacquisition of 21st Century Fox’s film and television assets to beapproved.

Diamond has nearly $1 billion in rights payments, mostly tobaseball teams, due in the first quarter this year. The company iscurrent on payments to hockey and basketball teams, but it mightwithhold payments from some baseball teams where it is trying torenegotiate a better deal.

Major League Baseball has set up a local media department incase it has to take over broadcasts for teams. Games would airlocally via MLB Network or streamed on MLB.TV in case thathappened.

“Diamond Sports Group’s bankruptcy declaration today is anunfortunate development that we have been expecting. DespiteDiamond’s economic situation, there is every expectation that theywill continue televising all games they are committed to during thebankruptcy process,” MLB said in a statement late Tuesday night.“Over the long term, we will reimagine our distribution model toaddress the changing media climate and ultimately reach an evenlarger number of fans.”

Diamond Sports isn’t the only company experiencing financialwoes with its regional sports networks. Warner Bros. Discovery,which has an ownership stake in three of the AT&T SportsNetnetworks, has given the Colorado Rockies, Houston Astros andPittsburgh Pirates until March 31 to reclaim their broadcastrights. WBD Sports is ending its investment in the networks.