Diamond Sports Group’s long-awaited bankruptcy filing finally hit the court docket Tuesday night.
The Sinclair subsidiary that owns and operates 19 Bally Sports-branded regional sports networks sought bankruptcy protection in a bid to restructure $8 billion in debt.
The petition filed in U.S. Bankruptcy Court for the Southern District of Texas came as a 30-day grace period triggered when Diamond Sports missed a $140 million interest payment on Feb. 15 that was set to expire.
Diamond Sports is on the hook for about $2 billion in rights fees annually with nearly half of that going to the 14 MLB teams it carries. MLB responded to the turmoil by creating a local media department, helmed by three former RSN execs.
While MLB geared up for the possibility of producing and broadcasting games via MLB.tv, Diamond Sports said it expects to “continue to operate in the ordinary course during the Chapter 11 process.”
In a statement, MLB reiterated its ready and able to step in if Diamond’s Bally RSN’s can’t or won’t televise games this season.
“Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process. Major League Baseball is ready to produce and distribute games to fans in their local markets in the event that Diamond or any other regional sports network is unable to do so as required by their agreement with our Clubs,” said the league. “Having streamed live games on MLB.TV for more than 20 years and produced live games for MLB Network since 2009, we have the experience and capabilities to deliver games to fans uninterrupted. In addition, we have hired additional seasoned local media professionals to bolster our capabilities in anticipation of this development.”
Diamond Sports’ debt load isn’t far off what Sinclair paid to acquire the RSNs along with chunks of Marquee and YES Network from Disney in August 2019. Federal regulators mandated Disney to divest the RSNs as part of its purchase of Twenty-First Century Fox.
The trend of cord-cutting — where cable and satellite customers paid for an RSN as part of a bundle — picked up steam after the Sinclair purchase. The company responded with Bally’s Sports+ last year, which starts at $19.99 a month.
Editor’s Note: This story has been update with statement from MLB.