Sinclair Broadcast’s Diamond Sports reportedly considering bankruptcy reorganization

A struggling subsidiary of Hunt Valley-based Sinclair Broadcast Group that owns regional sports networks is reportedly moving toward a bankruptcy reorganization.

Diamond Sports Group, the nation’s largest owner of cable TV sports channels that showcase more than half of all MLB, NHL and NBA teams, is considering restructuring $8.6 billion debt through a Chapter 11 bankruptcy, according to a Bloomberg report.


Sinclair reported Nov. 28 that it took a loss on the value of the Bally Sports Regional Sports Networks for the second time since buying them in 2019 for $10.6 billion from The Walt Disney Co.

Diamond, the Sinclair subsidiary created to hold those networks, wrote off $1 billion of the rebranded 19 networks’ book value in the recent third quarter, when it had a loss of $1.2 billion and cited a heavy loss of cable TV subscribers.


At the height of the coronavirus pandemic when national sports leagues canceled games and cut seasons short, Sinclair took a $4.2 billion charge to goodwill and intangible assets after the pandemic disrupted sporting events in 2020.

Bloomberg reported that Diamond is expected to miss $140 million in interest payments due in mid-February, citing people familiar with the matter.

A Diamond spokeswoman declined to comment on the report Tuesday.

Experts have said the outcome of any potential restructuring raises questions about the future of regional broadcasting rights revenue for the professional sports leagues.

Sources told Bloomberg that under one alternative, Diamond’s largest lenders would take ownership through a Chapter 11 bankruptcy restructuring. Those lenders include Prudential Financial, Fidelity, Hein Park Capital Management and Mudrick Capital Management, none of whom commented for the report.

In November, Diamond said the Bally networks had been hurt by a loss of subscribers, “which we believe was influenced in part by shifting consumer behaviors.”

As it has lost cable subscribers, Diamond has looked to other sources of revenue, including last year launching a new sports streaming service that does not require a cable subscription. Bally Sports+, a direct-to-consumer streaming service that launched in September in 14 NBA and NHL markets and on Roku, offers untapped potential, Sinclair CEO Chris Ripley said in November.

“As market awareness builds and as more and more people that are outside the bundle come in and watch their favorite home teams, that should definitely make up for some of these losses that we’re taking,” Ripley said.


He said that the streaming service is expected to eventually generate revenue beyond subscriptions by adding gaming elements, e-commerce components and targeted ads.

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In a call with analysts at the time, Ripley did not rule out a sale of the sports networks, though he said no sale was in process. He said advisers from investment bank LionTree and Moelis are “talking to parties about deleveraging, strategic partnerships and things of that nature.”

Sources told Bloomberg that streaming efforts have been hobbled by MLB’s resistance to giving the company additional streaming rights.

MLB, in an announcement earlier this month, said it hired a former top Diamond executive to start Wednesday to oversee the league’s management and distribution of local media rights. Billy Chambers, chief financial officer and chief operations officer of the Bally networks, will take on MLB’s newly created job of executive vice president for local media.

“He will work closely with the 30 clubs on the most effective means to distribute games to fans in local markets throughout the country,” the league said in its announcement.

Baseball Commissioner Rob Manfred added that Chambers “will play an integral role in how we navigate the rapidly evolving local media landscape in the future.”


Under a Chapter 11 bankruptcy, Diamond could end its contracts with teams, which could allow teams to reclaim media rights, the Bloomberg story said. The report said Diamond is on the hook for about $2 billion due in TV rights fees to teams and leagues this year.

Sinclair’s stock closed up 38 cents in Tuesday trading at $20.63 a share.