Due to its $8 billion debt load, Diamond Sports Group, the largest owner of regional sports networks, filed for bankruptcy protection on Tuesday.
The Sinclair Broadcast Group division, which is unconsolidated and independently managed, filed for chapter 11 bankruptcy protection in Texas.
Diamond Sports Group Bankruptcy
In a press release, the company stated that it is negotiating a restructuring support arrangement with Sinclair and the majority of its debt holders to pay off its debt.
The significant debt load resulted from Sinclair’s 2019 acquisition of Disney’s network assets for $10.6 billion, which also included about $8 billion in debt.
Diamond was responsible for hundreds of millions of dollars in annual loan interest payments even while it continues to pay the rights fees to the leagues and teams its broadcasts games for.
Diamond Sports announced last month that a $140 million interest payment that was due to bondholders was missed and that a 30-day grace period would be offered in its place. In an effort to restructure its debt load, the corporation had been in discussions with its creditors and other stakeholders during that time.
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Maintain Operations Despite Bankruptcy
The business, which has debts of more than $8 billion, stated on Tuesday night that it anticipates carrying on business throughout the bankruptcy process and that coverage of games shouldn’t be impacted.
Diamond Sports also disclosed that the company is pursuing a debt restructuring deal with creditors to pay off the majority of its debt. It would split off from Sinclair Broadcast Group, which acquired the regional sports networks in 2019, under a deal with creditors.
In case it becomes necessary to take over team broadcasts, Major League Baseball has established a local media department. In that instance, games would stream on MLB.TV or broadcast locally on MLB Network.
The bankruptcy filing by Diamond Sports Group today is a regrettable development that we had anticipated. MLB stated in a statement late Tuesday night that there is every expectation that Diamond will continue to broadcast all games during the bankruptcy process despite their financial position.
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