Diamond Sports Group files for Chapter 11 bankruptcy
Much of local sports broadcasting is at risk after Diamond Sports Group, which is responsible for nearly half of local MLB, NHL and NBA games. under the brand name Bally Sports, filed for bankruptcy protection in Texas on Tuesday. Conglomerates’ financial woes stem from expensive licensing agreements and cord-cutting habits of sports fans.
A subsidiary of Diamond Sports Sinclair Broadcast Group and its means and resources as “between $1 billion and $10 billion each” in his Chapter 11 petition, according to Reuters. Diamond CEO David Preschlack said the networks will continue to air games while the company goes through bankruptcy proceedings. The company’s finances have $425 million in cash, but it owes $9 billion to creditors. Diamond can pay back less than five percent at that value. By filing for Chapter 11 bankruptcy, Diamond agreed to transfer ownership of the company from Sinclair to creditors in exchange for the cancellation of $8 billion in debt. Diamond broadcasts matches of 42 professional teams big four sports leagues.
What happens to the employees of the regional sports network?
Now what about the employees those regional sports networks who broadcast its 42 franchise games? The easiest solution is to acquire another national sports broadcaster with local ties and take the financial mess off Diamond, but who is ready to take on that huge burden? Each Bally Sports brand probably has hundreds of employees, and if they don’t get paid, why would they work? For now, broadcasts won’t be in danger, but it’s a temporary band-aid for a much bigger problem. Local sports and streaming services have broadcasting rights viable way for networks to make money. At the end of last year, MSG announced launching a streaming service for $20-$25 a month as a cord-cutting way to watch the Knicks and Rangers. And it’s still under development. As for Bally Sports, it looks like a rough time is on the horizon.
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