A struggling subsidiary of Hunt Valley-based Sinclair Broadcast Group that owns regional sports activities networks has opted to overlook a debt fee due Wednesday, organising a possible chapter reorganization.
Diamond Sports Group, the nation’s largest proprietor of cable TV sports activities channels that showcase greater than half of all MLB, NHL and NBA groups, mentioned Wednesday it plans to “maximize its financial flexibility” and won’t pay the $140 million money curiosity funds on its debt.
That offers the community proprietor a 30-day grace interval to work with collectors and different stakeholders. Diamond reportedly had been contemplating restructuring its $8.6 billion of debt by a Chapter 11 reorganization. Diamond owns 19 Bally Sports Regional Sports networks in states equivalent to Arizona, Florida, Michigan, Ohio and California.
“Diamond Sports Group expects that its business will continue as usual, and it will keep broadcasting quality live sports productions for fans while it addresses its balance sheet,” the corporate mentioned in an announcement.
Diamond mentioned it plans to make use of the 30-day grace interval “to continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future.”
The curiosity fee was due Wednesday on Diamond’s 6.625% senior unsecured notes due in 2027 and on two senior secured notes, with rates of interest of 5.375%, which might be due in 2026, the corporate mentioned.
Sinclair, the nation’s largest proprietor of native tv stations, had reported Nov. 28 that it took a loss on the worth of the Bally Sports Regional Sports Networks for the second time since shopping for them in 2019 for $10.6 billion from The Walt Disney Co.
Diamond, the Sinclair subsidiary created to carry these networks, wrote off $1 billion of the rebranded 19 networks’ e-book worth within the latest third quarter, when it reported a lack of $1.2 billion.
At the peak of the coronavirus pandemic when nationwide sports activities leagues canceled video games and lower seasons quick, Sinclair took a $4.2 billion cost to goodwill and intangible property after the pandemic disrupted sporting occasions in 2020.
Experts have mentioned the end result of any potential restructuring raises questions on the way forward for regional broadcasting rights income for the skilled sports activities leagues.
In November, Diamond mentioned the Bally networks had been harm by a heavy lack of cable TV subscribers, “which we believe was influenced in part by shifting consumer behaviors.”
As it has misplaced cable subscribers, Diamond has regarded to different sources of income, together with final yr launching a brand new sports activities streaming service that doesn’t require a cable subscription. Bally Sports+, a direct-to-consumer streaming service that launched in September in 14 NBA and NHL markets and on Roku, affords untapped potential, Sinclair CEO Chris Ripley mentioned in November.
Last month, MLB employed a former high Diamond government to supervise the league’s administration and distribution of native media rights. Billy Chambers, previously chief monetary officer and chief operations officer of the Bally networks, grew to become MLB’s government vp for native media.
“He will work closely with the 30 clubs on the most effective means to distribute games to fans in local markets throughout the country,” the league mentioned in its January announcement.
Chambers is anticipated to “play an integral role in how we navigate the rapidly evolving local media landscape in the future,” Baseball Commissioner Rob Manfred had mentioned.
Besides proudly owning 19 networks, Diamond additionally has a three way partnership in Marquee, the house of the Chicago Cubs, and a minority curiosity within the YES Network, the native broadcaster of the New York Yankees and Brooklyn Nets.
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Source: www.bostonherald.com