The never-ending Diamond Sports Group bankruptcy process slogs on, with a judge delaying a scheduled June 18 hearing but also telling the company Tuesday that it has until July to come up with a "very clear business plan."
Also read: Everything You Need To Know About the Bally Sports Bankruptcy
Diamond, which operates 18 remaining Bally Sports regional pay TV channels, saw it's bankruptcy restructuring plan severely disrupted in late April, when it couldn't come to terms on a new carriage deal with Comcast.
In a Tuesday hearing to discuss the restructuring plan delay, a Diamond lawyer described Comcast talks as being at an "impasse."
"Based on Comcast's intransigence to negotiate off their current position," said attorney Joe Graham. "The company has little choice but to explore alternatives to Comcast."
Comcast responded with this statement: “Bally Sports chose not to exercise a right to extend their contract, and they declined multiple offers so we don't have the rights to their programming. More than 70%of our customers that received these networks didn’t watch them. We moved forward with our plan to proactively credit millions of customers for the costs associated with them – most are automatically receiving $8 to 10 per month in credits.”
Diamond entered Chapter 11 restructuring in March of last year. It hoped to finally submit a working plan to the court on June 18. But now it's in the familiar position of trying to buy more time, and the judge would only offer so much.
In the meantime, Diamond's league partners are growing increasingly nervous.
In the wake of the Comcast blackout, Major League Baseball already declared Diamond's restructuring plan "unconfirmable" in a damning court filing last month.
In Tuesday's hearing, the NBA and NHL also weighed in with their concerns that Diamond won't have a restructuring plan in place by October, when both leagues are set to start their new seasons.
“I want to reiterate why timing is so critical for the NBA. The start of the 2024-2025 season is fast approaching,” NBA attorney Vincent Indelicato said in court on Tuesday. “A lot needs to get done well ahead of the season to properly produce and distribute games.” (CNBC covered Tuesday's proceedings.)
With negotiations with the No. 2 U.S. pay TV provider at a stall, Diamond is losing money.
In a court filing last week, even with many of its money losing team deals renegotiated through bankruptcy, Diamond revealed that it will still lose $46.5 million from May 18 - August 16.
Diamond added this statement after our story was originally published: “We recently gained certainty on the vast majority of our principal revenue streams, which is beneficial for our team and league partners and their loyal fans and supports the growth of our DTC offering through our commercial arrangement with Amazon, following multi-year agreements with 10 of our top 12 distributors. We are focused on negotiations with our league partners and look forward to continuing constructive discussions as we work to finalize the path forward for Diamond’s business."
