United States Federal Judge Approves Wind-Down Plan for Diamond Sports Group
Endgame in Sight for Broadcaster’s Bankruptcy Proceedings
ARLINGTON, Texas — In a significant development, a United States federal judge has given the green light to a wind-down plan for Diamond Sports Group, potentially paving the way for the resolution of the broadcaster’s bankruptcy proceedings. However, uncertainties remain, particularly concerning Diamond’s dealings with Major League Baseball (MLB) and two of its teams.
Diamond Sports Group, which operates the Bally regional sports networks, currently holds agreements with 11 MLB teams. However, two of these agreements are now in jeopardy and could soon be terminated. According to insiders familiar with the proceedings, the teams at risk of losing their TV agreements are the Cleveland Guardians and the World Series champion Texas Rangers.
If Diamond were to drop these two teams, the clubs would regain their rights and could potentially be broadcasted by the league in 2024, similar to how the Padres and Diamondbacks were handled during the 2023 season. Alternatively, the Guardians and Rangers could seek out alternative broadcasting deals with other broadcasters.
“Our intention is to broadcast almost all of our Major League Baseball teams next year,” stated a lawyer representing Diamond in court on Wednesday. “There are a few, a very few, for which we do not have agreements in place. And, frankly, at this point, they are too expensive for us to broadcast without concessions. I have been informed that discussions are ongoing, and there have been reach-outs to both of the teams involved.”
The Guardians received $55 million in 2023, according to Cleveland.com. The average annual value of the Rangers’ 20-year deal, which commenced in 2011, is estimated to be $111 million.
“There’s no deal with MLB, there’s no deal with the Rangers, and we don’t know what Diamond’s intention is with respect to the Rangers,” expressed a lawyer representing the Texas Rangers in court on Wednesday.
MLB declined to comment following the hearing. The league has been striving for certainty regarding its 2024 broadcast agreements and revenues. A hearing on a motion brought by MLB is expected to take place no later than December 8. Currently, there is nothing preventing Diamond from potentially dropping additional teams beyond the Guardians or Rangers before the conclusion of the 2024 season.
Diamond Sports Group owns 19 regional sports networks across the country, broadcasting NBA, NHL, and MLB games. The company has been in bankruptcy court since March, leaving the leagues and teams in a state of uncertainty regarding their broadcasts and associated revenue. However, some clarity was gained during Wednesday’s court session when Judge Christopher Lopez approved a plan proposed by Diamond Sports Group. This plan allows the company to continue broadcasting NBA, NHL, and MLB games until September 2024, the end of the baseball season. The aim is to operate as profitably as possible during this period and subsequently begin winding down operations, attempting to repay creditors through potential liquidation or asset sales.
Nevertheless, the outlook remains subject to change. Judge Lopez acknowledged that two motions, including the one brought by MLB, “may blow up the entire cooperation agreement.” He emphasized the need to evaluate each motion independently.
Overall, the NBA and NHL have a clearer understanding of their future with Diamond Sports Group compared to MLB.
Judge Lopez also approved a term sheet between the NBA and Diamond Sports Group, allowing Diamond’s regional sports networks to continue airing local broadcasts for 15 NBA teams until the 2023-24 season. Subsequently, local television and direct-to-consumer rights for these teams would revert to the franchises and the league.
Diamond Sports Group is currently engaged in discussions with the NHL to reach a similar agreement to the one it has with the NBA. A lawyer representing Diamond informed the judge that they anticipate finalizing the agreement by the beginning of next week.