FanDuel Close to Putting Its Name on Imperiled Diamond RSNs

FanDuel already enjoys a status as the No. 1 sportsbook operator, as measured by U.S. market share. Now it’s extending its powerful reach and brand to the country’s largest collection of regional sports networks.

According to industry sources, the company is now finalizing a deal to become the title sponsor of the Diamond Sports Group–owned RSNs previously known as Bally Sports. The agreement has been in the works for several months, but DSG updated the U.S. Bankruptcy Court of its efforts to rename the networks Monday, without mentioning FanDuel by name.

“The debtors are close to reaching agreement with a third party on the terms of an agreement for naming and branding rights with respect to the debtors’ RSNs,” DSG said in a court filing. “The contemplated agreement will lock in a new naming rights partner for the 2024-2025 NHL and NBA seasons while also providing the debtors with a long-term naming rights partner if the debtors are ultimately able to emerge as a going concern.”

The deal will involve FanDuel acquiring a “single-digit percentage of equity” in a reorganized DSG, with performance-based warrants that would allow for a doubling of that ownership stake. 

The court filing arrives as DSG approaches a planned Nov. 14 hearing of its bankruptcy organization plan that would allow the company to continue as a viable entity. A status conference is set for Wednesday in that ongoing effort, and at another such conference last week, DSG disclosed it intends to shed nearly all of its MLB rights agreements. That dramatic move threatens to have significant ripple effects across baseball. 

It is not yet clear how a FanDuel-branded set of RSNs will interact with the sportsbook’s extensive content operations that already exist, highlighted by FanDuel TV.  

Money Matters

DSG, meanwhile, detailed its financial state as it nears that intended confirmation hearing. As part of recently renegotiated rights deals that include lowered rights fees, DSG said it owes the NBA and the 13 basketball teams it airs $253.1 million for the 2024–2025 season, and the NHL and nine of its teams are set to receive nearly $135 million. 

If DSG is forced to liquidate and wind down its operations, though, the NBA would instead receive a sum between $163.7 million and $187.9 million, while the NHL would gain between $87.3 million and $100.2 million.

As part of DSG’s efforts to winnow its baseball contracts, the company has just $16.4 million in outstanding MLB obligations. 

An estimate provided by Moelis, DSG’s investment bank, pegs the enterprise value of a reorganized DSG at between $600 million and $1 billion. That figure is a mere fraction of the $10.6 billion value of the RSNs just five years ago, when they were acquired by DSG parent company Sinclair. In addition to DSG covering fewer teams now—due to either dropping some clubs or their leaving voluntarily for other broadcast options—the dramatic loss in value illustrates just how substantially that cord-cutting and broader media industry disruption has ravaged the RSN business. 

DSG, meanwhile, confirmed Amazon is no longer a potential investor, though the online retail and streaming giant remains in talks on a more conventional deal to distribute the RSN content on Prime Video. But DSG warned “the debtors’ ability to reorganize as a going concern will depend on [its] ability to raise additional exit financing commitments. … Although the debtors are in discussions with multiple potential financing sources, there can be no assurances that the debtors will be able to secure commitments.”