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If there was any question about the animosity MLB has for Diamond Sports Group, that has now been emphatically made clear.
As the bankrupt Bally Sports parent continues its efforts to reorganize, the league bashed the company in a new filing with the U.S. Bankruptcy Court, saying an ongoing carriage battle between DSG and Comcast heightens the chances of a future liquidation.
“It is highly likely that the loss of carriage of the debtors’ broadcasts by Comcast, and the resulting loss of licensing fees from Comcast, will render the [reorganization] plan unconformable, thereby wasting time and estate resources to the detriment of MLB, the signatory clubs, and other interested parties,” MLB said.
The league went on to say that “the debtors should not be permitted to stumble through the restructuring process,” and that “the debtors once again face a very high risk that they will not emerge from these Chapter 11 cases as a going concern.” DSG generates the vast majority of its revenue from distributors such as Comcast.
The Comcast-DSG dispute, which has already grown more tense, remains at a stalemate with no recent movement in talks. MLB called the ongoing blackout of several of its teams carried on Bally Sports regional sports networks “profoundly harmful.”
DSG has not responded to MLB’s scathing statement. The league’s latest shot at the company arrived as DSG is scheduled to go before the court June 18 for confirmation of the reorganization plan, though the league said in its statement that “it is difficult to imagine how confirmation can proceed on the current schedule.”
The testiness continued in a virtual status conference in the case held Wednesday afternoon. MLB extended its rather downcast assessment of DSG’s progress in the case as James Bromley, an attorney for the league, said, “We are coming into another season where [DSG] is an undependable partner. … This is not a deal that MLB and its clubs have signed up for.”
The NBA and NHL, meanwhile, made its first comments about the viability of the proposed reorganization. The NBA said that it has “more questions than answers,” as well as “concerns” about DSG’s ability to provide a workable plan, while the NHL similarly said, “Time is of the essence. And we have told the debtors… they need to resolve certain business-related matters.”
There were some other items of note from the status conference, as DSG said that it is nearing a new naming rights deal to rebrand the networks, an expected situation as the agreement with the Bally’s casino and gaming company is ending this year. Meanwhile, DSG is pushing to change the deadline for objections to the reorganization plan from May 22 to June 5.
