A huge portion of local sports broadcasting is in jeopardy after Diamond Sports Group, responsible for nearly half of local MLB, NHL, and NBA games under the Bally Sports brand, filed for bankruptcy protection on Tuesday in Texas. The conglomerates’ financial troubles stem from expensive broadcast rights agreements and the cord-cutting habits of sports fans.
Diamond Sports is a subsidiary of Sinclair Broadcast Group and listed its assets and liabilities as “between $1 billion and $10 billion each” in its Chapter 11 petition, per Reuters. Diamond’s CEO, David Preschlack, said the series of networks will continue to broadcast games while the company goes through the bankruptcy process. The company’s finances stand at $425 million in cash readily available, but it owes $9 billion to lenders. Diamond could pay back less than five percent at that value. By entering Chapter 11 bankruptcy, Diamond agreed to transfer ownership of the company from Sinclair to the lenders in exchange for eliminating $8 billion of their debt. Diamond broadcasts games for 42 professional teams in the big four sports leagues.
Updated: Last week, the Texas Rangers told DSG that “it would terminate its media rights deal with the parent of the Bally Sports Regional Networks in the event of its insolvency, which the company’s bankruptcy filing may trigger,” according to The Athletic. Diamond is objecting to the move, the Athletic is reporting, citing a Wednesday court filing.
“We expect that there will be no disruption in the televising of Texas Rangers games for the upcoming season,” the team told the outlet. “We are confident that a long-term solution will be accomplished for the RSN issue.”
What happens to regional sports network employees?
Now what happens to the employees of those regional sports networks who broadcast the games of those 42 franchises? Getting absorbed by another national sports broadcaster with local ties and taking the financial slack off of Diamond is the easiest option, but who is readily available to take on that huge of a load? Every Bally Sports brand likely has hundreds of staff members and if they don’t get paid, why would they work? For now, broadcasts won’t be in jeopardy, but that’s a temporary band-aid for a much larger problem. Broadcasting rights for local sports and streaming services have become a viable path for networks to make money. Late last year, MSG announced the launch of a streaming service for $20-25 bucks a month as a cord-cutting way to watch the Knicks and Rangers. And it’s still in development. As for Bally Sports, it looks like a rough period will be on the horizon.
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