Baseball Commissioner Rob Manfred said the league is prepared for whatever happens with Diamond Sports Group after the financially troubled parent company of 19 Bally Sports regional networks skipped about $140 million in interest payments due Wednesday.
The missed payments started a 30-day grace period that could be the prelude to a bankruptcy filing, possibly leading to changes in how televised games are made available to viewers.
“The company intends to use the 30-day grace period to continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future,” Diamond said in a statement.
Diamond is a subsidiary of Sinclair Broadcast Group Inc., and its regional networks broadcast games of 14 Major League Baseball, 16 NBA and 12 NHL teams.
Manfred said Diamond has told MLB it intends to pay its baseball teams, but he called it an “unfolding story” that could change.
“We are prepared no matter what happens with respect to Diamond to make sure the games are available to fans in their local markets,” he said. “We think it will be both linear in the traditional cable bundle and digitally on our own platforms, but that remains to be seen.”
Diamond said as of Sept. 30 it had debt of $8.674 billion. It has nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter this year.
“Our Bally RSNs have been negatively impacted by elevated levels of subscriber erosion which we believe was influenced in part by shifting consumer behaviors resulting from media fragmentation, the current economic environment and related uncertainties," Diamond said in its financial statement for the quarter ending Sept. 30. “These factors are expected to have a negative impact on future projected revenues and margins of our Bally RSNs."
Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox’s film and television assets to be approved.
