Yahoo Finance Sports Broadcaster Diamond Is Near Its Breaking Point, Pro Leagues Say
(Bloomberg) -- Local sports broadcaster Diamond Sports Group’s shot at surviving the summer has withered and the bankrupt company is close to losing any chance to revive itself, lawyers for professional baseball, basketball and hockey leagues told a federal judge Tuesday.
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The company, owned by Sinclair Inc., has yet to hash out a deal with Comcast Corp. to broadcast games on the cable company’s system. If a deal fails to materialize, that would be a fatal blow to Diamond, representatives of Major League Baseball and the National Basketball Association told US Bankruptcy Judge Christopher M. Lopez. Their concerns about Diamond’s future were echoed by the National Hockey League.
“Diamond, from our view, doesn’t appear to have a viable business plan,” Vincent Indelicato, a lawyer who represents the NBA, said during a status conference on Diamond’s Chapter 11 case.
Falling television ratings have pressured Diamond and other US regional sports networks as audiences move to streaming and cancel cable-television service. Diamond, which shows games in the home markets of dozens of teams, has struggled to extend traditional television broadcast deals with all three leagues while it builds a streaming product.
Diamond has agreements with 10 of its top 12 distributors, the company said in a statement.
“We recently gained certainty on the vast majority of our principal revenue streams, which is beneficial for our team and league partners and their loyal fans” the company said via email. The sports broadcaster said it will continue negotiating with the leagues “to finalize the path forward for Diamond’s business.”
The company’s latest restructuring proposal is backed by $115 million from Amazon.com Inc. and includes a streaming deal on the online marketplace’s Prime Video platform under which Diamond has locked in digital rights.
Major League Baseball has fought Diamond throughout the broadcaster’s bankruptcy case, questioning the plan and demanding financial details to prove the company can survive once it leaves court protection. Previously, the NBA and the NHL had shown more patience for the turnaround proposal.
That appeared to have changed Tuesday as those leagues joined baseball’s lawyers in blasting Diamond.
Diamond acknowledged that it has hit an impasse in the Comcast talks, but argued that it still has time to put the finishing touches on a reorganization plan that could win court approval at the end of July.
Concerns about whether Diamond’s plan is viable are “speculative and premature,” company attorney Andrew N. Goldman said during the court hearing. The broadcaster will explore alternatives to Comcast, Diamond told Lopez.
The company filed for bankruptcy in 2023 just four years after it was sold by Walt Disney Co. for $9.6 billion.
The case is Diamond Sports Group, 23-90116, US Bankruptcy Court, Southern District of Texas (Houston)
(Updates with comment from Diamond in the fifth and sixth paragraphs.)
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