Diamond Sports Group, the Sinclair-affiliated company that is the country’s largest owner of RSNs, filed for Chapter 11 bankruptcy protection Tuesday evening in the U.S. Bankruptcy Court for the Southern District of Texas. Diamond operates 19 RSNs under the Bally Sports brand name, with games from more than half of all MLB, NBA and NHL teams.
In a release Tuesday, the company said that it “intends to use the proceedings to restructure and strengthen its balance sheet, while continuing to broadcast quality live sports productions to fans across the nation.”
The company says its RSNs will continue to operate during the proceedings and that it has $425 million in cash on hand.
The company is “finalizing a Restructuring Support Agreement (‘RSA’) with holders of a majority of the Company’s debt and Sinclair Broadcast Group, Inc. (‘Sinclair’) to eliminate over $8 billion of the Company’s outstanding debt,” it added.
“The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the Company for long-term success and has determined that the best path forward for the Company and its stakeholders is to restructure through a Chapter 11 process,” DSG CEO David Preschlack said in a statement. “DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love. With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company.”
But the cable TV business has eroded much faster than anticipated, forcing the company to develop a direct-to-streaming offering on an accelerated timetable , annoying its league partners in the process.
With their regional appeal and expensive fees, RSNs have become a tough sell for many cable providers, after long being part of pay-TVs linchpin.
Warner Bros. Discovery, another owner of RSNs, told its leaguer partners last month that it wanted to exit the business entirely, offering to hand over its RSNs to the MLB, NBA and NHL for no cost.