Diamond Sports Group (DSG), the largest operator of US regional sports networks (RSNs), has had its reorganization plan approved by a court, allowing the company to emerge from bankruptcy.
Judge Christopher Lopez gave the go-ahead during a hearing in the US Bankruptcy Court in Houston, Texas, yesterday (November 14), saying it is “compliant with every provision under the law.”
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Diamond CEO David Preschlack said in a statement: “This is a landmark day for Diamond, as we embark on a new path for our business. Diamond is now unencumbered by legacy debt, financially stable, and enthusiastically supported by new ownership.
“Looking ahead, Diamond is well-positioned to further enhance its product offering and remains committed to delivering the highest quality live sports content in-market to fans through both linear and direct-to-consumer frameworks."
DSG had been in Chapter 11 bankruptcy proceedings in the Southern District of Texas since it filed for protection in March 2023. The company said in a financial filing last year that it had debt of $8.67 billion.
The firm will emerge out of bankruptcy with significantly less debt — around $200 million — but also with fewer teams and networks.
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By GlobalDataWhen Diamond entered bankruptcy, it owned 19 networks under the Bally Sports banner and had the rights to 42 professional teams (14 MLB baseball, 16 NBA basketball, and 12 NHL ice hockey).
The reorganized company now operates as the FanDuel Sports Network after agreeing to a naming rights deal with the sports betting firm last month. It has 16 networks and carries games for 27 franchises (six MLB, 13 NBA, and eight NHL).
The 16 networks provide coverage in 31 states. The company expects to complete the restructuring process in the coming weeks.
Over recent months, DSG has been renegotiating its various local deals with a wide range of US sports teams.
Last month, as part of the reorganization plan, Diamond voided the contracts of the Detroit Tigers and Tampa Bay Rays MLB franchises while attempting to rework the deals of the five franchises that had partial ownership of their regional sports networks.
Diamond has revised deals with the Tigers and Rays, as well as reaching agreements with the St. Louis Cardinals, Los Angeles Angels, and Miami Marlins, which include streaming rights. Talks are ongoing with the Kansas City Royals.
The deals with the Angels and Marlins are multi-year, multi-market linear and digital rights agreements through which Diamond will continue as the exclusive local media partner of the teams.
FanDuel Sports Network Florida will remain the home of the Marlins, while FanDuel Sports Network West will continue to air Angels games.
Meanwhile, the Cincinnati Reds and Diamond have ended their joint venture, but a lawyer for Diamond said during Thursday's hearing that they would be open to resuming discussions. Shortly after the hearing, Major League Baseball announced it will produce and distribute Reds games next season.
Cincinnati had a 20% stake in their RSN affiliate. Diamond bought back the Reds’ stake for $1.
The Atlanta Braves were the only franchise whose contract would have been unchanged, but the franchise has agreed to an amended deal, which includes streaming rights.
MLB had been a consistent opponent of DSG’s attempts to emerge from bankruptcy, decrying the lack of clarity the consistently embattled local broadcast landscape has and its effect on the franchises.
The league and DSG had long been locked in a bitter struggle, with the former lamenting the latter’s financial situation that forced the league to take over local broadcast rights and production for several of its franchises.
However, ahead of the crucial final bankruptcy court hearing for DSG yesterday, MLB withdrew its objection to the company’s reorganization late on Wednesday to clear DSG’s path out of bankruptcy.
MLB’s original objection came after it was forced to step in and take over the distribution and production of games played by the San Diego Padres and the Arizona Diamondbacks after those teams failed to agree to new DSG deals when their contracts expired last year.
Last month (October), the league announced that it will produce local broadcasts for the Cleveland Guardians, Milwaukee Brewers, and Minnesota Twins franchises in the 2025 season after these franchises were dropped by DSG.
Steaming is a key component for Diamond as it seeks to reach new audiences. On Wednesday, the company announced a multi-year agreement with the Amazon Prime Video service to make its channels available as an add-on subscription.
Prime Video announced earlier this year that it would buy a minority stake in Diamond Sports.
Diamond will also offer single-game pricing on its direct-to-consumer app for NBA and NHL games from 5 December.
Viewers will have the option for single games at $6.99, as well as the chance to sign up for monthly or season pass subscriptions.
DSG and Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Company for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox’s film and television assets to be approved.
