Diamond Sports is requesting the help of mediators in its negotiations with lenders as it rushes forward with a restructuring plan.The holder of the greatest number of regional sports networks intends to put a plan in place prior to the upcoming basketball and hockey campaigns.Diamond has taken legal action in court against the parent organization Sinclair for apparently "taking advantage of" Diamond for massive amounts of money while being aware that the sports channel industry was not doing well.
Diamond Sports Group, the largest owner of regional sports networks, has drawn increasing attention in court as it works to negotiate a reorganization plan with creditors to meet the pressing demands of upcoming NBA and NHL seasons in October. Judge Christopher Lopez informed the parties that a resolution should be strived for, citing that sports are part of the fabric of American culture. In response, two U.S. Bankruptcy Court judges from the Southern District of Texas - David Jones and Marvin Isgur - were appointed by the court to preside as mediators. Court approval also extended the period of time Diamond has to come up with a plan until Sept. 30. The company has been struggling under the weight of $8 billion in debt and the difficulties of competing in the television market with the rise of streaming services. To handle the issues, Diamond is looking to reset some of its rights deals with teams and hoping to shed its large debt load. The potential for exclusive rights to local games has attracted major broadcast operators such as Nexstar Media Group, Gray Television, and E.W. Scripps Co. Last week, the NHL reported that it is having constructive talks with Diamond but that time is of the essence.
Over the course of its bankruptcy process, Diamond has faced various disputes, one of the most notable being its conflict with MLB over streaming rights and fees which has caused Diamond to remove some teams from its Bally Sports networks and led to its lawsuit against Sinclair. On Wednesday, it presented the details of its legal action. The $10.6 billion acquisition of Fox Sports, now known as the Diamond portfolio, from Disney – part of the Fox Corp. 21st Century assets buyout – imposed a debt between $400 million and $650 million on Diamond and resulted in an $8 billion debt load. The condition of the cable channels and pay-TV suppliers have been on a downward slope over the past few years and Diamond alleges that Sinclair's ownership has hastened the procedure. In its court papers, Diamond accused Sinclair of extracting more than $100 million in management fees annually, even though they were aware of the state of the business, and utilizing a "nefarious strategy" to transfer over $1.5 billion in cash and other resources to its own benefit. A spokesperson for Sinclair has responded to the lawsuit, noting that they remain convinced of its unjustified nature and will be defending it vigorously. Last year, Diamond appointed a new board and executive team as well as becoming a non-consolidated, autonomous subsidiary of Sinclair.
Comentarios