The leading local provider for sports in the United States, Diamond Sports, has filed for bankruptcy following a debt of more than $8billion.
Diamond Sports operates 19 regional sports networks under the Bally Sports brand, and is the TV home for 42 teams across Major League Baseball, the National Hockey League and the National Basketball Association. The company also pay those teams for the rights to broadcast their games, but are in financial chaos.
The company missed out on a $140million interest payment last month, and filed for Chapter 11 bankruptcy protection on Tuesday evening. However, in a statement released by the company on Tuesday, they expect to keep operating through bankruptcy and state that coverage should not be affected.
"DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love," Diamond Sports CEO David Preschlack said in a statement. "We look forward to working constructively with our team and league partners and all DSG stakeholders throughout this process and beyond."
Diamond claims that it has $425m of cash in the bank, but owes over $8bn due to the increasing cost of sports broadcasting and due to more viewers switching from cable to online streaming alternatives. They've entered bankruptcy that will eliminate the debt, by switching ownership.
The networks are currently a Sinclair Broadcast Group subsidiary, but will be transferred to Diamond's lenders to resolve the debt. It's a huge blow for MLB though, with the season set to begin later this month.
The Atlanta Braves, Arizona Diamondbacks, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, San Diego Padres, St. Louis Cardinals, Tampa Bay Rays, and Texas Rangers are all teams that DSG hold the rights too. But MLB have already set up a local media department in the event that they must take over broadcasting.
"Diamond Sports Group´s bankruptcy declaration today is an unfortunate development that we have been expecting," MLB said in a statement on Tuesday night. "Despite Diamond´s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process.
"Over the long term, we will reimagine our distribution model to address the changing media climate and ultimately reach an even larger number of fans." Along with the MLB, DSG also hold the rights to 16 NBA and 12 NHL teams.
