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The bankrupt Diamond Sports Group says it remains confident in its ability to successfully reorganize and emerge as a newly viable company. Several major sports leagues, however, have serious reservations about that, and there is now a heightening battle against the clock to resolve the difference.
The stakes around an already-tense situation for DSG were raised further in a status conference Wednesday before the U.S. Bankruptcy Court. MLB doubled down in the hearing on its prior rebuke of DSG, particularly in light of the ongoing blackout of the regional sports networks on Comcast, with league attorney James Bromley saying, “I think it’s important, from the perspective of Major League Baseball, to understand how devastating it is to lose carriage on Comcast.”
The NBA and NHL, meanwhile, made their first formal remarks on the developing reorganization plan and echoed the baseball-related sentiment.
“We simply cannot afford to have our next season disrupted by the uncertainty as to whether Diamond will or will not have a viable business,” said NBA attorney Vincent Indelicato. NHL attorney Shana Elberg added, “The day-to-day approach of whether or not a professional sports team’s games will be broadcast doesn’t work for us, and can’t continue.”
Critical To-Do List
Among the issues that likely still need to be addressed before a confirmation hearing on the reorganization plan that is still scheduled for June 18:
- Satisfy these concerns from the leagues and shore up what will be the company’s future base of programming.
- Receive and address any formal objections to the reorganization plan that could come from the leagues, or any other party. A May 22 deadline for those objections to be filed with the court has now been moved to June 5.
- Strike a new distribution agreement with Comcast, the No. 2 cable carrier in the country. DSG attorney Brian Hermann said he is “optimistic” of ultimately reaching a new deal and called that situation “fluid.” But industry sources tell Front Office Sports there has been no material movement recently in talks with Comcast.
Many of DSG’s programming and distribution issues have been a constant presence during a bankruptcy period now in its 15th month.
“How in the world are we going to be able to have a [confirmation] hearing—which I think is going to be contested—and [conduct] discovery … when we are just over 30 days [out] and we have simply no information?” Bromley said. “Everything right now is up in the air.”
Judge Christopher Lopez, for his part, is still preaching patience—despite the winnowing amount of time.
“I get where we are. And I know the debtors understand where they are as well,” Lopez said. “We’ve got some work to do. We should all be a little smarter, [with] a little bit more information in the early June time period. … There’s been a lot of good work done, and I don’t want to lose sight of it.”
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