Diamond Sports Group, the largest owner of regional sports networks, has filed for Chapter 11 bankruptcy after missing a $140 million interest payment last month.
The company owns 19 networks under Bally Sports Regional Sports Networks banner, with broadcasting rights for 42 professional teams including 14 baseball, 16 NBA, and 12 NHL.
Despite the bankruptcy filing, Diamond has around $425 million in cash reserves to continue operating.
The company’s CEO, David Preschlack, has stated that the networks will continue to broadcast games, and the company is negotiating a new agreement that would eliminate most of its $8.67 billion debt.
Sinclair Broadcast Group is Diamond Sports Group’s parent company, having purchased the regional sports networks from The Walt Disney Co. in 2019 for nearly $10 billion.
Diamond Sports would become a separate company under the proposed agreement.
The COVID-19 lockdowns caused regional sports networks to lose millions of customers, with empty local bars and restaurants canceling their subscriptions.
As a result, Warner Bros. Discovery has given the Colorado Rockies, Houston Astros, and Pittsburgh Pirates until March 31 to reclaim their broadcast rights.
WBD Sports, which has an ownership stake in three of the AT&T SportsNet networks, is ending its investment in the networks.
Diamond Sports produces around 5,000 live televised games each year through the Bally Sports channels, with nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter of this year.
The company is current on payments to hockey and basketball teams, but it may withhold payments from some baseball teams where it is trying to renegotiate a better deal.
Major League Baseball has created a local media department in case it has to take over broadcasts for those teams. Games would air locally on the MLB Network or stream live on MLB.TV if that happens.
Despite the bankruptcy filing, the league expects Diamond Sports to continue televising all games they are committed to during the bankruptcy process.