Let's not turn the page just yet on the long, arduous 13-month bankruptcy restructuring of Diamond Sports Group -- the NBA and NHL filed motions last week indicating they're "deeply concerned" about the company's latest attempt to further delay the proceedings.
The operator of the Bally Sports local cable channels seemed to have achieved a pivotal milestone in its arduous journey to avoid liquidation earlier this month, when it announced a carriage agreement with top U.S. pay TV operator Charter Communications.
Also Read: Everything You Need To Know About the Bally Sports Bankruptcy
Many folks, us included, assumed a final restructuring plan would be presented on Wednesday (April 17), when Diamond is due back at the Houston bankruptcy court overseeing its proceedings.
But Diamond has filed a request for yet another extension to present this plan -- until Nov. 14, which is as far as the company can extend such proceedings under federal bankruptcy law.
While Diamond and its soon-to-be former parent company, Sinclair Broadcast Group, have had a notoriously icy relationship with Major League Baseball for years, the NBA and NHL have remained largely supportive and patient, as Diamond has slogged through a Chapter 11 process that started in March of 2023.
But just like last year, the two leagues are facing the prospect of starting their 2024-25 seasons in October without a complete resolution on the fate of the bankrupt company that controls local TV distribution for a large portion of their teams.
"The NBA has now grown deeply concerned about whether the Debtors can timely confirm and consummate a plan that will enable them to produce and distribute NBA games and meet their other obligations to the NBA for the 2024-25 NBA season. The Debtors’ going concern plan is dependent on negotiations with multiple parties, including the NBA, that have not been completed," NBA lawyers wrote in a motion filed last week.
"The NHL and its Clubs find themselves in essentially the same position they were in last spring vis-à-vis their respective agreements and potential ongoing business relationships with the Debtors — lacking certainty about their next season and beyond," wrote NHL lawyers in a similar motion filed on the same day.
Certainly, Diamond has plenty of work to do. Not only does the company have to turn short-term deals with the NBA and NHL into long-term agreements, it faces a similar task with Comcast and DirecTV, which are carrying the Bally Sports RSNs on temporary renewal terms.
Diamond also has to work out the details of its separation from Sinclair, which started this whole mess in 2019 when it agreed to pay $10.6 billion to acquire 19 Fox SportsNet channels.
"More than 12 months have passed since the Debtors filed these chapter 11 cases on March 14, 2023. At every turn — both pre- and post-petition — the Debtors have found a supportive and constructive partner in the NBA, which has worked tirelessly to aid the Debtors’ attempts to transform their business model," the NBA added. "... While the Debtors announced a new distribution deal with Charter on April 3, 2024, the effects of that deal on subscribers, revenues and other metrics key to the viability of the Debtors’ plan — both in the short and long term — will need to be reflected in an updated Disclosure Statement."
