(Automated translation by Reuters, please see disclaimer
(Addition of Diamond’s statements to paragraphs 3 and 8) by Dietrich Knauth
Diamond Sports Group received U.S. court approval Wednesday to begin voting on its bankruptcy plan, allowing it to move forward with a debt reduction deal while negotiating longer-term deals term with cable companies and sports leagues.
Diamond, a subsidiary of Sinclair Broadcast Group SBGI.O , is pursuing a restructuring that would eliminate more than $8 billion in debt and provide the company with additional financing from Amazon.com AMZN.O in a streaming deal signed in January.
Diamond said in a statement that the court approval was “another important step in our restructuring and we strive to confirm our plan and emerge as a sustainable, forward-looking company.”
Diamond is also negotiating longer-term contracts with cable operators, the National Hockey League and the National Basketball Association, Brian Hermann, Diamond’s lawyer, said at a bankruptcy court hearing in Houston.
Diamond recently signed a new long-term contract with cable operator Charter Communications CHTR.O , and hopes to build on that success by signing new deals with DirecTV and Comcast CMCSA.O , Mr. Hermann said. Contracts with these three companies represent more than 80% of Diamond’s revenue, according to court documents.
“We hope to be able, by the summer, to confirm a plan supported by agreements with at least the big three distributors as well as the two leagues I mentioned,” Mr Hermann told the court .
Diamond, which broadcasts approximately 40% of regular-season baseball, hockey and basketball games in the United States through its Bally Sports-branded television channels, has not concluded bankruptcy agreement with Major League Baseball.
The company cut ties with two baseball teams during its bankruptcy and continues to broadcast games for 12 other teams. Diamond said she is not renegotiating her contracts with MLB.
MLB, which has opposed Diamond’s efforts to stream more baseball games directly online, said in a court filing April 10 that it had “serious concerns” about the ability to Diamond to become a sustainable business after restructuring from bankruptcy.
The NHL and NBA also raised concerns last week, saying the uncertainty of Diamond’s negotiations with cable providers made it difficult for leagues to plan beyond 2024.
Both leagues appeared more willing to work with Diamond than MLB in their recent court filings, with the NHL saying it was “hopeful” and the NBA saying it had “worked tirelessly” to support the restructuring of Diamond.
At Wednesday’s hearing, Bankruptcy Judge Christopher Lopez approved Diamond’s request to begin voting on his plan, setting a May 22 deadline for votes and scheduling a June 18 hearing to consider the approval finalization of Diamond’s restructuring plan.
Diamond filed for bankruptcy in March 2023, stuck between expensive broadcast rights deals and declining revenues due to sports viewers abandoning cable. The sports broadcaster had been heading toward a liquidation of its business before reaching a restructuring deal in January with its lenders, Sinclair and Amazon.
2024-04-17 19:29:08
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