Heading into a crucial restructuring hearing at the end of July, the news continues to trend south for bankrupt Diamond Sports Group.
The operator of the troubled Bally Sports regional sports networks initiated the loss of its second NHL franchise in a week on Wednesday, when it asked the court overseeing its bankruptcy to allow it to cut ties with the Dallas Stars, a linchpin tenant on Bally Sports Southwest, ahead of the upcoming 2024-25 NHL season.
Also read: Everything You Need To Know About the Bally Sports Bankruptcy
"The Debtors also have been engaged in ongoing discussions with the NHL and the Stars regarding, among other things, the Stars Agreement and the parties’ go-forward relationships. During these discussions, the Stars requested that the parties mutually terminate the Stars Agreement in advance of the 2024–25 NHL season," Diamond said in its motion, filed Wednesday.
Should the court grant the request, Diamond would be left with nine remaining NHL teams under the Bally Sports banner.
Earlier this week, the Stanley Cup champion Florida Panthers announced they will not be returning to Bally Sports next season and instead will broadcast their games in over-the-air channels in the Miami-Fort Lauderdale, West Palm Beach and Fort Myers via a broadcast deal with Scripps Sports.
The deal will cover most of the Panthers’ regular-season games and the first round of the playoffs. And a direct-to-consumer streaming service is also part of the plan. The move by the Florida franchise follows a similar one made by 2022-23 Stanley Cup winner the Vegas Golden Knights, who also fled the RSN business for a hybrid broadcast/DTC arrangement with Scripps Sports.
“We want to ensure that we’re addressing the heightened demand for our team and our sport, and we want to accelerate that growth,” Mark Zarthar, the Panthers’ chief strategy officer, said Tuesday. “And so, what is the next big step for us is making the viewership of our games much more accessible? With Scripps as an over-the-air provider, they will help us reach over 2.6 million households.”
Diamond Sports Group, the subsidiary set up by Sinclair Broadcast Group to manage the 19 Fox SportsNet RSNs in purchased in 2019 for $10.6 billion, filed for Chapter 11 protection in March 2023. In January, the unit appeared to turn the corner following what had seemed like certain liquidation.
It set up new financing from creditors, brought in Amazon as an investor, settled a beef with parent Sinclair and carved out key distribution deals with Charter Communications, DirecTV and Cox Communications.
But little has gone right since April 29, when Comcast dropped the Bally Sports channels after failing to reach renewal terms with Diamond.
Last week, Altice USA followed suit, also banishing the RSNs from its Optimum-branded cable TV service.
Diamond’s league partners have less faith than ever that the RSN unit can continue on, and the man overseeing the company's restructuring, U.S. Bankruptcy Judge Chris Lopez, already declared that the subsidiary is out of chances for delay and must present a clear restructuring plan starting on July 29.
