Diamond Sports Group, the largest regional-sports-network operator in the United States, received approval to emerge from bankruptcy Thursday on the 20-month anniversary of it filing for Chapter 11. Judge Christopher Lopez, presiding in the Southern District of Texas, approved the company's reorganization plan in court, saying it is "compliant with every provision under the law."
Diamond announced in a subsequent release that it "expects to complete the restructuring process in the coming weeks, after satisfying customary conditions."
Diamond, which recently ran broadcasts under the name Bally Sports, currently possesses the linear-cable and digital-streaming rights for a combined 27 MLB, NBA and NHL teams. The company recently agreed to a new naming-rights deal with FanDuel, as well as a commercial agreement with Amazon that will eventually allow subscribers to also watch Diamond's RSNs locally through Prime Video. Those deals -- along with agreements with the company's largest distributors, most notably Comcast -- helped get Diamond past the finish line.
Diamond CEO David Preschlack called Thursday "a landmark day" in a statement.
"Diamond is now unencumbered by legacy debt, financially stable and enthusiastically supported by new ownership," he added. "Over the last eighteen months, we have worked tirelessly to strengthen our business, including by reaching revised multi-year rights agreements with team and league partners, go-forward carriage agreements with major distribution partners, a broad naming rights partnership with FanDuel and a commercial agreement with Amazon. These critical achievements and a realigned business are enabling us to emerge as a sustainable, go-forward entity that drives value for our partners and fans."
One of the clearest signs Diamond would get its plan approved arrived Wednesday, when Major League Baseball and the Atlanta Braves withdrew their objection. MLB has had a testy relationship with Diamond over the past couple of years, annoyed by missed payments and skeptical of the company's sustainability. A tipping point arrived in early October, when Diamond submitted a reorganization plan that called for it to shed every MLB contract except that of the Braves.
But Diamond has since agreed to revised deals with the Los Angeles Angels, Miami Marlins, St. Louis Cardinals, Detroit Tigers and Tampa Bay Rays, all of which include direct-to-consumer streaming rights. A revised deal with the Braves, which also includes streaming rights, followed, prompting MLB and the Braves to withdraw their objection. The company maintains the rights to 13 NBA teams and eight NHL teams, all of which agreed to new contracts with lower rights fees in August.
Shortly after the judge's ruling, MLB announced that it would produce and distribute local games for the Cincinnati Reds, who recently split from Diamond. The Reds are the seventh team to fall under MLB's purview, along with the San Diego Padres, Arizona Diamondbacks, Colorado Rockies, Cleveland Guardians, Milwaukee Brewers and Minnesota Twins.
Diamond's restructuring will include reducing its debt from nearly $9 billion to $200 million, according to the company, which added that it currently possesses $100 million in liquidity. The restructuring plan received what Diamond categorized as "nearly unanimous support" from debt holders. Diamond will operate as a stand-alone entity in the reorganization; Sinclair, the parent company, will have its equity interest canceled.
Sinclair, which previously installed Diamond Sports Group as a subsidiary, originally purchased 21 regional channels from Fox for $10.6 billion in 2019 but took on $8 billion in debt in order to do so. That debt, coupled by accelerated cord-cutting amid an ever-changing media landscape, prompted Diamond to fall into bankruptcy.