Diamond Sports Group, the subsidiary of Sinclair Broadcast Group that operates or co-owns 21 regional sports networks, appears headed for a messy bankruptcy process. The story of how it got here starts in 1955, with the birth of Tim Berners-Lee, the man widely credited with inventing the world wide …
Oh, you’re short on time? Then let’s jump to 2019.
Timeline of the Diamond Sports Group bankruptcy
June 2019: In order to acquire more than $70 billion worth of Fox assets, Disney agrees to sell Fox Sports’ nearly two dozen regional sports networks to assuage U.S. Department of Justice concerns about the monopolistic power of owning them along with ESPN. Mickey Mouse is given 90 days to find a buyer.
August 2019: Following an auction process, Sinclair (joined by Byron Allen and private equity partners) buys the networks for $9.6 billion. “Costly high-yield debt” was used to finance the transaction, which included more than $8 billion in borrowed money.
October 2020: In part due to pandemic disruptions, DSG begins preparing for a possible restructuring of its debt. “We think the RSNs have been Sinclair’s Achilles heel,” Wells Fargo Securities media analyst Steven Cahall writes.
November 2020: Sinclair announces a $4.23 billion impairment charge tied to the RSNs.
February 2021: Sinclair reportedly considers a bankruptcy option for its regional sports business amid restructuring talks.
January 2022: As DSG prepares to launch its own direct-to-consumer streaming service to mitigate the effects of decreasing cable penetration, the company adds a $600 million loan from existing bondholders.
August 2022: Bally Sports+ is officially announced. As part of its shift to streaming, Diamond brings in new board of manager members, including former NBC Sports and ESPN exec David Preschlack.
September 2022: DSG’s board reportedly explores the possibility of a sale.
November 2022: Diamond reports a loss of $1.2 billion over three months, due in large part to “subscriber erosion.” Sinclair reports another impairment charge—this time for $1.1 billion.
December 2022: DSG’s board votes to block Sinclair from controlling the RSNs’ day-to-day operations. Preschlack is named CEO of Diamond Sports Group.
February 2023: Facing a $140 million bill the following week for interest payments, Diamond plans to file for bankruptcy. According to S&P Global Ratings, the company is set to owe league partners $1.8 billion in rights fees in 2023. The business overall has $8.6 billion in debt.
What will happen next?
Diamond Sports Group is expected to file for bankruptcy by Friday. But that doesn’t mean the Bally Sports channels will disappear overnight.
Certain teams—including MLB’s Diamondback, Guardians, Padres and Reds—could be in danger of losing coverage if Diamond opts to reject certain carriage agreements it previously made. MLB commissioner Rob Manfred has pledged that fans would still have access to games.
“Our goal would be to make games available not only within the traditional cable bundle but on the digital side, as well,” he said at a February owners’ meeting. The league hired three new staffers to a recently launched local media department, potentially to handle those responsibilities.
NHL and NBA teams will have more time to sort out their plans, with few disruptions expected before the end of their 2022-2023 seasons in June.