Diamond Sports Group has asked a federal bankruptcy court for an emergency hearing on Tuesday, hoping to hold off strident demands from its pro-league partners to see its sensitive pay TV contracts.
Diamond is still at an impasse on a new carriage agreement with Comcast for its Bally Sports-branded regional sports channels. The NBA, NHL and Major League Baseball want to examine the company's contracts with Charter Communications, DirecTV, Cox Communications and other pay TV providers to see if Diamond still has the distribution heft to remain a viable local TV partner.
Also Read: Everything You Need To Know About the Bally Sports Bankruptcy
Specifically, the leagues want to look for so-called "most favored nation" (MNF) clauses in these contracts. Should Diamond give into Comcast's demand that its Bally Sports-branded channels reside on a more expensive premium tier, these other pay TV operators could use their MNF clauses to add similarly favorable terms to their existing deals with Diamond.
On Monday, Cox sent a letter to the judge presiding over Diamond's 15-month bankruptcy process, Chris Lopez, expressing concern over the "highly sensitive information" the leagues have requested. (Interesting side note: Lopez is also presiding over disgraced right-wing conspiracy peddler Alex Jones' bankruptcy.)
"The Leagues issued a series of sweeping discovery requests that seek the terms of each contract each Distributor entered into with the Debtors," wrote Cox lawyer Stuart Lombardi. "But that sort of contract-by-contract and market-by-market information constitutes trade secrets that Cox guards closely, and its disclosure to the Leagues -- each of whom may be direct or indirect contract counterparties in future contract negotiations -- risks significant competitive harm to Cox."
Diamond once again managed to delay until July 29 a hearing during which it has to lay out a "very clear" restructuring plan (Lopez's words), but the leagues have seemingly run out of patience.
Both the NBA and NHL, for example, are concerned that they'll enter their new 2024-25 seasons in October with no local TV partner for half their teams, should Diamond liquidate.
Diamond, the subsidiary set up by Sinclair Broadcast Group after the company purchased 19 Fox SportsNet channels in 2019 for $10.6 billion, appeared headed for just that fate at the end of last year.
Then in January, a dramatic turnaround began:
* Diamond received new debt financing.
* It settled an internal beef with Sinclair, in which it accused its parent company of using it as a "piggy bank."
* Diamond secured a financing commitment from Amazon.
* It secured new distribution deals with Charter Communications, DirecTV, Cox and Fubo.
But all of that remarkable momentum was undone overnight back in late-April, when Diamond couldn't come to terms with Comcast. Bally Sports-branded RSNs were subsequently removed from the No. 2 U.S. pay TV operator's programming grids.
In the wake of the Comcast impasse, MLB told the court that Diamond's restructuring plan -- regardless of when it finally manifests and what it ultimately looks like -- is "unconfirmable" without participating by Comcast.
