March 14 (Reuters) – Diamond Sports Group, which gives regional tv broadcasts for almost half of NBA, NHL and MLB games, filed for U.S. bankruptcy protection in Texas on Tuesday, caught in between costly broadcast rights agreements and sports viewers’ cord-cutting habits.
Diamond Sports, a Sinclair Broadcast Group (SBGI.O) subsidiary that operates the “Bally Sports” branded channels, listed assets and liabilities in between $1 billion and $ten billion every single in its Chapter 11 petition.
Diamond CEO David Preschlack mentioned Tuesday that the Diamond “will continue broadcasting games and connecting fans across the nation with the sports and teams they like” for the duration of its Chapter 11 bankruptcy.
Diamond mentioned that it has $425 million in money on hand, but it owes $9 billion to its lenders and is weighed down by lengthy-term broadcast rights agreements that make much less financial sense as shoppers move away from cable and towards on the web streaming selections.
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Diamond enters Chapter 11 with an agreement that will eradicate $eight billion of the company’s debt by transferring ownership of the organization from Sinclair to Diamond’s lenders. A group of Diamond senior lenders will alternatively be repaid in money rather than in organization equity, according to Diamond.
Diamond broadcasts games for 16 NBA teams, 14 MLB teams, and 12 NHL teams, paying teams for the suitable to televise their games and charging a charge to cable providers.
Diamond mentioned Friday that it had missed a payment to MLB’s Arizona Diamondbacks, but mentioned it continued to make payments to other teams as scheduled.
Representatives for MLB and NHL could not promptly be reached for comment Tuesday evening.
An NBA spokesperson referred Reuters to previous comments produced by Commissioner Adam Silver, who mentioned in February that the league was “not all that worried” about a Diamond Sports bankruptcy. NBA has the potential to step in and stream games to fans in the brief term, and it was currently in the method of negotiating longer-term broadcast agreements with Diamond and other broadcasters.
MLB has previously mentioned that Diamond’s troubles would not effect broadcasts for the baseball season that opens March 30. MLB has staffed up a new regional broadcast division to supply replacement broadcasts if required, according to an MLB spokesman.
But MLB’s contingency arranging for broadcasting games would not replace payments owed by Diamond Sports to the 14 MLB teams who rely on income from regional Television broadcast offers.
Reporting by Dietrich Knauth Editing by Edmund Klamann, Christopher Cushing & Shri Navaratnam
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