Largest RSN Owner in U.S. Prepares for Bankruptcy

The largest owner of local sports channels in the U.S. is reportedly heading toward an $8.6 billion debt restructuring in bankruptcy court.

Sinclair Broadcast Group’s Diamond Sports Group, which includes Bally Sports Regional Networks and showcases MLB, NBA, and NHL games, has seen a decline in cable-TV subscribers.

• After launching a streaming service across all its markets in September, DSG reported a 10% decline in subscribers for 2022 in December.
• In August, Diamond hired investment banks LionTree and Moelis & Company, leading to speculation that Sinclair could face bankruptcy or sell its broadcast provider of local sports.

Bloomberg reported that Diamond is expected to skip $140 million in interest payments due mid-February, emerging from the restructuring process — in which lenders including Prudential Financial and Fidelity would reportedly become equity owners — in May or June. 

The group is reportedly looking to sell DSG after the restructuring. 

Bankruptcy Business

If Diamond were to file for bankruptcy, it could affect media rights revenue for the major leagues since it would reportedly have the option to end its contracts with teams. DSG reportedly owes teams around $2 billion this year, but has only around $585 million on hand.

“You’re looking at a potential rewrite of the entire regional sports business on the other side of this restructuring,” said Davis Hebert, a senior telecom analyst at CreditSights.