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The bankrupt Diamond Sports Group, after months of being on the receiving end of league broadsides to act with much more speed, has now issued its own urgent request to aid an attempted reorganization.
The regional sports network operator has filed an emergency motion with the U.S. Bankruptcy Court for approval of a long-expected naming-rights deal with FanDuel. The pact with the sportsbook operator will give FanDuel naming rights over the portfolio of networks and replace Bally Sports, as that pact expires at the end of the Major League Baseball season.
As part of the deal, FanDuel will gain a 5% equity stake in DSG, with performance-based warrants to acquire another 5%. DSG is also moving to keep the financial terms under seal, but it said the agreement contains “a significant rights fee payment and certain media and advertising spending commitments.” DSG is also set to gain some content currently shown on FanDuel TV, while FanDuel is incentivized to help increase DSG’s subscriber base.
Though DSG also considered five other potential naming-rights partners, the company saw a “high degree of alignment between the debtors’ RSN business and FanDuel’s online gaming business and target customers.”
Turning the Tables
Beyond a straightforward naming-rights deal, though, there is significant time urgency surrounding the entire DSG request to the court. If the pact is not approved by Monday, FanDuel can walk away without penalty. Additionally, DSG is characterizing the agreement as a fundamental pillar of its reorganization, particularly as it approaches a scheduled Nov. 14 court date to have a plan confirmed to emerge from bankruptcy.
“Rebranding the RSNs now—at the beginning of the 2024–2025 NBA and NHL seasons—is an important near-term business need and also a critical component of the debtors’ overall reorganization efforts,” DSG said in a court filing. “The debtors believe that the agreements with FanDuel … will provide incremental revenue and advantageously position the debtors’ reorganized business for future growth in a rapidly changing industry.
“Any delay in entry of an order approving the FanDuel term sheet may damage the debtors’ brand value with sports fans and disrupt the reorganization efforts at a critical juncture,” the filing continued.
That plea for immediate action, however, directly counters MLB’s long-held frustration with DSG regarding its local baseball rights. Just last week, the league again pressed the company to disclose its broadcast plans for 2025 to allow affected teams to make alternate broadcast plans, if needed. Before reaching contract renewals with DSG in August, both the NBA and NHL levied similar complaints about the company.
DSG’s petition to the court also disclosed that the initial term of the FanDuel agreement runs only to April 30, with an automatic, multiyear extension should the company succeed in its reorganization.
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