By Dietrich Knauth
NEW YORK (Reuters) – Major League Baseball, the National Hockey League and the National Basketball Association said on Wednesday that bankrupt broadcaster Diamond Sports may not survive without a new deal with cable distributor Comcast.
The sports leagues told a bankruptcy judge at a court hearing in Houston that they need more information about a negotiating impasse that caused Diamond’s Bally Sports-branded channels to be pulled from Comcast at the start of May, with baseball season underway and the NBA and NHL in the midst of postseason playoffs.
Diamond, a subsidiary of Sinclair Broadcast Group, had been pushing to finalize its bankruptcy restructuring by June 15, but the sports leagues said Diamond must first reach deals with the three major cable partners, including Comcast, that provide 80% of the company’s revenue.
Without those deals, Diamond’s revenue might not be enough to sustain its business, and the leagues may have to seek alternative broadcast arrangements for the teams currently under contract with Diamond. Diamond currently broadcasts games for over one-third of NBA, NHL and MLB teams.
“Sitting here today, we don’t know what the go forward plan is, or even if there is a viable plan,” the NHL’s attorney Shana Elberg said. “We cannot head into another offseason in that position.”
U.S. Bankruptcy Judge Christopher Lopez urged Diamond to keep working on its bankruptcy restructuring and to provide more information to the sports leagues at a status conference in two weeks.
“There’s been a lot of good work that’s been done, and I don’t want to lose sight of that,” Lopez said. “But there are still serious questions that need to be answered.”
The NBA and NHL had, until now, been supportive of Diamond’s restructuring efforts, staying largely on the sidelines in the company’s bankruptcy while it worked out deals with other stakeholders. Diamond has said it intends to reach new long-term broadcast deals with NBA and NHL teams as part of its restructuring.
MLB, which was already at odds with Diamond over the broadcaster’s desire to stream more games to fans online, has seen two teams’ broadcast contracts canceled during the bankruptcy, and suffered further disruption when Comcast removed Bally Sports channels in May.
Diamond’s inability to reach a deal with Comcast was a “potentially insurmountable obstacle” that had already proven “profoundly harmful to MLB” and its fans Major League Baseball wrote in a court filing ahead of the hearing.
Diamond has said it is continuing to negotiate with Comcast, and it has reached long-term agreements with its other critical cable partners, DirecTV and Charter.
Diamond filed for bankruptcy in March 2023, caught between expensive broadcast rights agreements and a drop in revenue due to cord-cutting by sports viewers.
(Reporting by Dietrich Knauth; Editing by Bill Berkrot)
Comments