A Houston bankruptcy court has approved the Diamond Sports Group’s restructuring plan, ending a process that started in March 2023.
Diamond, a former subsidiary of Sinclair Broadcast Group established to manage 19 regional sports networks the broadcaster purchased from Fox for $10.6 billion in 2019, expects to formally complete the restructuring process “in the coming weeks.”
Diamond’s recently rebranded FanDuel Sports Network (formerly “Bally Sports” under a previous naming rights deal) now includes 16 channels, down from 19 at the start of bankruptcy.
The subsidiary has deals with 27 remaining NBA, NHL and Major League Baseball teams, a decline from 42 at the beginning of restructuring.
According to figures recently published by CNBC, Diamond’s enterprise value is now only around $600 million. However, according to the subsidiary, it will exit restructuring with only around $200 million of debt versus $9 billion going in. The company said it will be capitalized with more than $100 million in cash and cash equivalents on its balance sheet.
Upon emergence from Chapter 11, Diamond’s lead creditors — funds managed by or affiliated with PGIM, Inc., Hein Park Capital Management LP, Discovery Capital Management, Hudson Bay Capital Management LP, and Alta Fundamental Advisors LLC — will exchange certain funded debt claims for equity in the reorganized company.
Diamond will operate as a standalone company, having completed its operational separation from Sinclair.
On a separate but related note, Diamond will exit restructuring with a new distribution deal with Amazon, allowing for wholesale distribution of direct-to-consumer (DTC) streaming versions of FanDuel channels within the Amazon Prime Video Channels online marketplace.
“Over the last 18 months, we have worked tirelessly to strengthen our business … reaching revised multi-year rights agreements with team and league partners, go-forward carriage agreements with major distribution partners, a broad naming rights partnership with FanDuel and a commercial agreement with Amazon," said Diamond CEO David Preschlack, in a statement. "These critical achievements and a realigned business are enabling us to emerge as a sustainable, go-forward entity that drives value for our partners and fans.”
What's left
Six MLB teams will remain on FanDuel-branded channels: the Atlanta Braves, Los Angeles Angels, Miami Marlins, St. Louis Cardinals, Detroit Tigers and Tampa Bay Rays.
There are 13 remaining NBA teams: the Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Detroit Pistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, Oklahoma City Thunder, Orlando Magic and San Antonio Spurs.
And eight remaining NHL franchises: the Carolina Hurricanes, Columbus Blue Jackets, Detroit Red Wings, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues and Tampa Bay Lightning.
Diamond has secured DTC streaming rights from all 27 teams it has under contract. Those clubs that would not surrender streaming rights, or renegotiate contracts that were unprofitable for Diamond, saw their deals terminated amid the Chapter 11 process.
As part of the bankruptcy process, Diamond was also able to secure pay TV carriage renewals with Charter Communications, Comcast, DirecTV, Cox Communications and Fubo.
However, how enduring Diamond remains in the marketplace is questionable. Court proceedings exposed a significantly strained relationship between Major League Baseball Commissioner Rob Manfred and Sinclair. The broadcaster is now out of the picture, but Manfred and MLB still plan to eventually package the local TV rights for each of the league’s 30 teams and license a service to a large streaming company (think Amazon).
Currently, MLB is managing local TV rights for nine of its teams, most of them refugees from Diamond RSNs. But the six MLB teams still under contract with Diamond can all exit their deals as soon as 2028.