Bankruptcy Judge Blocks Suns New Rights Deal

A bankruptcy judge blocked the rollout of a new broadcast pact the Phoenix Suns announced two weeks ago.

Judge Christopher Lopez on Wednesday voided the TV and streaming pact the Suns and Mercury entered into to replace their current Diamond Sports Group’s deal. In a written ruling after a Wednesday hearing, Lopez wrote the deal “violated the automatic stay” in Diamond Sports’ bankruptcy case.

“The Suns shall continue to perform and comply with their obligations under the agreement [with Diamond Sports] in all respects,” Lopez wrote.

CNBC was the first outlet to report Lopez’s decision.

“The Phoenix Suns and Mercury are excited to continue giving our fans everything they want for the best possible experience and making our games accessible to everyone,” Josh Bartelstein, CEO of the Suns and Mercury, said in a statement to Front Office Sports. “We are committed to working collaboratively on a fair resolution that will be in the best interest of our fans, our community, and our players.”

On April 28, the Suns and Mercury unveiled their replacement for Diamond Sports’ Bally Sports Arizona with Gray Television and the streaming firm Kiswe — a unique setup amid the precipitous decline of regional sports networks due to cord-cutting. 

Diamond Sports almost immediately called the move “an improper effort by the Suns to change their broadcasting partner without permitting Diamond to exercise our contractual rights.”

Lopez wrote in his order the decision “does not affect” the Mercury’s deal with and Gray Television/Kiswe. But for the deal to move forward, a deal would need to first be reached with Diamond Sports.

Diamond Sports filed for bankruptcy in March looking to restructure about $8 billion in debt. Diamond Sports became the local broadcast partner for the Suns when Diamond’s parent company, Sinclair, acquired the former Fox Sports RSNs in 2019. 

Lawyers for the Suns argued in court filings that the current deal expired at the end of the regular season. Diamond Sports disagreed as it countered that it still has the right to refuse any new deal first. 

A message left with a Suns spokesperson was not immediately returned. 

The new deal will commence with the start of the WNBA season. The Mercury’s first regular season game is May 19.

Correction: The original version of the story mischaracterized the impact of the judge’s decision on the Mercury.