A federal bankruptcy judge in the US has ruled that beleaguered regional sports network (RSN) operator Diamond Sports Group (DSG) will not yet be forced to turn over its broadcast contracts to third parties, as it seeks a resolution to its long-standing contract disputes and ongoing bankruptcy proceedings.
DSG’s major rightsholder partners, most prominently Major League Baseball (MLB), had been pushing Judge Christopher Lopez to allow them to view the contents of DSG’s contracts with its broadcast and carrier partners, in order to assess the viability of DSG’s financial plan to emerge from bankruptcy.
A final confirmation hearing over the bankruptcy case is scheduled for July 29, but MLB lawyers had wished to view DSG’s documents beforehand in order to gauge how realistic the future of their broadcast partnership is.
DSG has presented three years of financial projections, which opposing lawyers state cannot be verified to be accurate without full disclosure of carrier contracts.
Lopez has thus far been unwilling to use his powers to sanction DSG, and has continued that trend much to the chagrin of MLB.
MLB’s lawyers argued heavily with Lopez over their wish to see the documents ahead of time, with Lopez saying that he would only step in if forced, and that he would prefer the two parties to work out their differences out of court.
DSG operates 17 RSNs under its Bally Sports brand which, combined, hold the local rights to 38 major US sports franchises (12 MLB, 15 NBA basketball, and 11 NHL ice-hockey).
The RSN operator initially filed for bankruptcy in March 2023 amid spiraling rights costs and declining revenues but has slowly been looking to work its way out of that situation by securing renewed carrier deals that would aid bankruptcy restricting and grow revenues.
In recent months DSG has agreed carrier deals with Cox Communications and DirecTV, among others, with the likes of the MLB not privy to the financial details of the contract.
DSG’s plan to emerge from bankruptcy, which it originally entered into 15 months ago, faced a major hiccup when it failed to agree to a vital carrier deal with telecoms giant Comcast, one that would have been a major step on the road to financial recovery.
Comcast’s deal with DSG expired on April 30, with the Bally Sports slate of RSNs subsequently removed from Comcast services in a major blow for all of its covered sports franchises, with the NHL and NBA having been in the middle of season-ending playoffs at the time and the 2024 MLB season having only just started.
The lack of a Comcast deal not only hamstrung DSG’s reach, but also the financial projections it desperately needs to prove in order to emerge from bankruptcy.
