Already fighting for its corporate life on multiple fronts, the bankrupt Diamond Sports Group is now taking aim at major satellite television carrier DirecTV for unpaid distribution fees.
On Tuesday, DSG asked a U.S. bankruptcy court in Texas to compel DirecTV to make good on its owed fees and bring its existing distribution contract up to date. DSG alleges DirecTV began underpaying the regional sports network operator when it stopped carrying the San Diego Padres in May, then continued that practice in July, when it also dropped the Arizona Diamondbacks.
Despite no longer having access to those games through DSG’s Bally Sports, DSG claims DirecTV remains contractually obligated to pay in full. The amount in question has been redacted in court filings but certainly extends into the millions of dollars.
“DirecTV is pursuing an unlawful course of ‘self-help’ against the debtors,” DSG said. “DirecTV has no basis for withholding any portion of the payments due … Faced with this reality, and unable to point to any contractual provision entitling it to relief, DirecTV instead seeks to resort to supposed ‘equitable’ remedies.”
DirecTV has not yet responded to DSG’s motion.
The dispute arrives at a particularly delicate time, as the companies are also in the midst of negotiations on a new, long-term carriage agreement.
DSG continues to work on a formal reorganization plan and has asked for additional time to complete it. The company has also dropped its Arizona Coyotes rights, but signed a new deal to retain the rights to the Los Angeles Kings.