Diamond Sports Group, the subsidiary of Sinclair Broadcast Group that operates regional networks under the name Bally Sports, has filed for Chapter 11 bankruptcy protection.
Diamond has the rights to 14 major league teams, including the Detroit Tigers. It recently skipped about $140 million in interest payments due last month, setting up Tuesday’s bankruptcy filing. In Detroit, Bally Sports also airs Detroit Pistons and Red Wings games.
“The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the company for long-term success and has determined that the best path forward for the company and its stakeholders is to restructure through a Chapter 11 process,” said David Preschlack, CEO of Diamond, in a statement Tuesday.
“We are utilizing this process to reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt. The financial flexibility attained through this restructuring will allow DSG to evolve our business while continuing to provide exceptional live sports productions for our fans.”
Preschlack said Diamond expects its Bally Sports regional sports networks will continue to operate during the Chapter 11 process. Diamond says it has roughly $425 million of cash “to fund its business and restructuring.” Diamond said as of Sept. 30 it had a debt of $8.67 billion. The company had nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter of this year.
“With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company,” Preschlack said.
“Diamond Sports Group’s bankruptcy declaration today is an unfortunate development that we have been expecting. Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process,” Major League Baseball said in a statement released Tuesday.
“Major League Baseball is ready to produce and distribute games to fans in their local markets in the event Diamond or any other regional sports network is unable to do so as required by their agreement with our clubs,” MLB said. “Having streamed live games on MLB.TV for more than 20 years and producing live games for MLB Network since 2008, we have the experience and capabilities to deliver games to fans uninterrupted. In addition, we have hired additional seasoned local media professional to bolster our capabilities in anticipation of this development. Over the long term, we will reimagine our distribution model to address the changing media climate and ultimately reach an ever larger number of fans,” the league said.
MLB Commissioner Rob Manfred said in February that Major League Baseball could eventually produce games digitally in conjunction with MLB.TV if Bally Sports regional networks are no longer broadcasting them.
Manfred has also acknowledged some teams could be at risk of losing revenue, depending on the status of their regional sports networks, and that MLB is prepared to help.
The Tigers and Red Wings declined to comment Tuesday night.
Tuesday’s bankruptcy was filed in the U.S. Bankruptcy Court for the Southern District of Texas.
Diamond also owns rights to the broadcasts for the Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays and Texas Rangers.
Associated Press contributed.