Why more than half of NBA teams might be in for a major revenue loss / News - Basketnews.com

As the parent company of the regional sports network that provides local coverage for 16 NBA teams is filing for bankruptcy, those teams might face a serious loss of revenue.

Credit: Christophe Saidi/SIPA - Scanpix Credit Christophe Saidi/SIPA - Scanpix

Diamond Sports Group, which runs Bally Sports, is expected to file for bankruptcy within the next month after missing a $140 million interest payment, per a report from John Ourand of the Sports Business Journal. This will result in bankruptcy and restructuring/reorganization effort.

Bally Sports is the regional sports network that provides local coverage for 16 NBA teams. If Bally Sports is unable to meet their contractual obligations to the teams and the NBA, it could cause major problems for the teams and the league as a whole. Beyond obvious local coverage issues, media rights are part of the Basketball Related Income (BRI) calculation, which drives how the NBA derives its salary cap figures.

Per the same report, the company intends to use the 30-day grace period to continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future. Diamond Sports Group expects that its business will continue as usual, and it will keep broadcasting quality live sports productions for fans while it addresses its balance sheet.

Credit AP Photo/Morry Gash

An impending bankruptcy filing has been of concern for the leagues with teams on the regional sports networks – NBA, NHL and MLB – who get paid large fees for the rights to the games that aren’t nationally aired. In the short term, this doesn’t change much on the surface for fans. Bally Sports is expected to continue to operate, but NBA teams could see their revenues affected.

Diamond Sports instituted its own board for Bally Sports, and in December appointed David Preschlack, a former NBC Sports executive, as its CEO. Diamond Sports’ portfolio includes Bally Sports Detroit, Bally Sports Florida and Bally Sports Southwest. Its networks are home to more than half of MLB, NHL and NBA teams in the U.S.

The 16 NBA franchises that could be financially impacted with Diamond Sports declaring bankruptcy:

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