Diamond Sports Group, the largest owner of regional sports networks, announced on Tuesday that it has filed for Chapter 11 bankruptcy. The move comes after it missed a $140 million interest payment last month.
Diamond, which owns 19 networks under Bally Sports Regional Sports Networks banner, said it has about $425 million in cash on hand to continue operating during bankruptcy. Those networks have the rights to broadcast games from 42 professional teams — 14 baseball, 16 NBA and 12 NHL.
“DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love,” Diamond Sports CEO David Preschlack said in the statement.
The company filed for bankruptcy in the Southern District of Texas and is negotiating a new agreement that will eliminate most of its roughly $8.67 billion debt, it said. Under the deal, Diamond Sports would become a separate company from its current parent Sinclair Broadcast Group.
Sinclair bought the regional sports networks from The Walt Disney Co. in 2019 for nearly $10 billion. The U.S. Department of Justice forced Disney to sell the RSNs after its acquisition of a large part of 21st Century Fox’s film and television assets.
RSNs hit hard by pandemic lockdowns
Diamond Sports isn’t the only company experiencing financial woes with its regional sports networks. RSNs lost millions of customers during COVID-19 lockdowns as empty local bars and restaurants canceled their subscriptions, the Wall Street Journal reported last month.
Warner Bros. Discovery, which has an ownership stake in three of the AT&T SportsNet networks, has given the Colorado Rockies, Houston Astros and Pittsburgh Pirates until March 31 to reclaim their broadcast rights. WBD Sports is ending its investment in the networks.
Through the Bally Sports channels, Diamond produces roughly 5,000 live televised games each year.
Diamond has nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter this year. The company is current on payments to hockey and basketball teams, but it might withhold payments from some baseball teams where it is trying to renegotiate a better deal.
Major League Baseball has created a local media department in case it has to take over broadcasts for those teams. Games would air locally on the MLB Network or stream live on MLB.TV if that happens.
MLB said in a statement Tuesday that league officials expected Diamond Sports would declare bankruptcy soon.
“Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process,” the league said.
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