The long-term outlook for Diamond Sports Group is increasingly dim.
It’s already facing the prospects of holding no major pro team rights after the 2024 MLB season, and during a U.S. bankruptcy court hearing Wednesday, lawyers for DSG parent Sinclair Inc. said that chances of a company liquidation next year are growing.
“To Sinclair folks who originally acquired Diamond, they’re kind of bummed. They’re bummed that this business that they put in a billion-and-a-half [dollars] of equity value in, is now going to be shut down,” said Sinclar lawyer David Seligman. “There’s going to be people losing their jobs … Diamond’s business is going to go away.”
DSG lawyer Andrew Parlen said a company liquidation may happen in 2024 if a new and profitable operating path can’t be found.
But there remains plenty of anger and finger-pointing. DSG, the parent of Bally Sports, received court approval of its cooperation agreement, which will see it surrender its NBA team rights at the end of the 2023-24 season. It might also have to release its rights to the NHL and MLB.
MLB, however, objected to that agreement, as did Sinclair, and the court tentatively plans to hear those objections early next month.
“There is a deal with the NBA. And that’s great,” said MLB lawyer James Bromley. “We’ve been hearing that one might be coming for quite a while and there is not one yet with the NHL. We understand it’s on the way, but we have not seen it. And there is no deal with Major League Baseball. And there are a number of issues that need to be addressed.”
Among those issues is how many MLB teams DSG will carry in 2024 — with the Cleveland Indians and Texas Rangers the subjects of the latest rumors of potential DSG cuts — and what the resulting impacts on team payrolls will be.
