The MLB, NBA and NHL may coordinate the acquisition of the country’s dominant owner of a regional sports TV network where financial woes pose an increasing threat to the teams, the Post learned. .
The trio of professional sports leagues will soon be in talks with Diamond Sports, which operates the 21 regional Barry Sports network, which accounts for more than half of the country’s local broadcasting market, said a source close to the situation.
Future deals are looming as diamonds owned by Baltimore-based Sinclair Broadcasting Group are bleeding cash and could head for bankruptcy filing if White Knight is not found in the next few months. the source claimed.
In early 2019, Sinclair Acquires Fox Sports Networks from 21st Century Fox for $10.6 billion, giving the exclusive rights to broadcast the matches of 42 teams. These included his 14 MLB teams such as the St. Louis Cardinals and San Diego Padres. 16 NBA teams, including the Miami Heat. 12 NHL teams, including the Detroit Red Wings.
But soon after the acquisition, cable giants such as Charter Communications and Comcast began slashing the fees they pay for sports amid rampant cord-cutting. Meanwhile, his Dish, a satellite TV provider, withdrew from the regional sports network entirely, causing the loss of the so-called RSN and hasn’t waned since.
21st Century Fox shares common ownership with News Corp., publisher of the New York Post.
Now, according to insiders, Diamond could acquire $3 billion, including debt that is currently trading at a heavily discounted $2 billion. Sinclair will offer to transfer Diamond’s stake to creditors, who will sell most of the business to his MLB, NBA and NHL, and Diamond will retain a minority stake in the business, sources said.
“They will offer it to all three leagues,” said a source close to the negotiations.
Creditors (mainly the hedge fund that collected Diamond’s bad debts) could drive Diamond and its Bally RSN into bankruptcy over the next three years if no deal is reached on what has been described as a “grand solution” sexuality increases. According to sources, up to six months.
Diamond has cash on hand to survive until next year, but is technically insolvent and creditors could quickly push it into bankruptcy, said a source close to the situation.
A source close to Diamond said, “I think Diamond is under pressure from hedge funds to settle the liquidation issue early.”
A source close to Sinclair told the Post that creditors were overstating their ability to force bankruptcy.
Diamond does not control the rights of any team in New York City. Sometimes he pays teams local broadcast rights in 25-year contracts, and then about once a year he sells broadcasts to cable and satellite companies, planning to turn a profit.
In recent days, Diamond has told the league that it can continue broadcasting games even if it goes bankrupt, but won’t have to pay royalties to the team as it will be protected from creditors.
In a bankruptcy scenario, RSN’s buyer could decide to reject the existing overpriced broadcast rights deal and arrange a cheaper deal, sources said. Some teams get up to 30% of their earnings from their RSN rights, so a potential bankruptcy could hit the teams’ salaries, insiders claim.
“That’s Diamond’s bargaining chip,” said a large debt investor following the situation.
A league official told The Post that the league is working on a contingency plan. MLB, for example, is ready to broadcast the game in the local market, charging the cable company its normal rate and handing over the proceeds to the team owner until Diamond emerges from bankruptcy.
“The speculations raised by anonymous sources are just speculations,” a Sinclair spokesperson told the Post on Tuesday. We look forward to continuing to work with them to transform the RSN model.”
Meanwhile, according to some insiders, it was MLB that effectively ended the Diamond’s best last hopes of surviving alone in recent months.
september 26th diamond Launches over-the-top streaming service, allowing consumers to pay around $20 per month Watch games in your home market without a cable subscription. As he is the only MLB team to play in the summer, he is considered vital to Diamond’s success.
But MLB only transferred streaming rights to five of the 14 teams, and Diamond insisted those rights had to be included in existing contracts with teams, but demanded an additional fee. Did.
“The team feels that Sinclair is being cheap and using the commissioner as an excuse,” an MLB team owner told The Post.
MLB and NHL declined to comment. An NBA spokesman said the story was not true and declined to provide further details.
Meanwhile, MLB is considering launching its own streaming service. Host a local game as early as next year, The Post reported exclusively in October. Elsewhere, Amazon now has the ability to broadcast local games and air them on a regional basis, sources said. So are Apple, ESPN plus, and NBC’s Peacock.
Early 2019, MLB partnered with Liberty Media in failed bid For Fox Sports Network’s Sinclair, Disney was spinning off as part of a deal to acquire 21st Century Fox. After Sinclair won Fox RSNs, his Ebitda for 2019 was projected to be his $1.6 billion.
From then on downhill was hard. Sinclair’s Diamond reported on Aug. 30 that his full-year EBITDA, or earnings before interest, taxes, depreciation and amortization, will fall from $183 million to $200 million.
Diamond, on the other hand, has $8.5 billion in debt and pays about $450 million in interest annually, making it spend twice as much as it earns on junk-rated debt interest alone. The lowest bond currently trades at around 20 cents on the dollar.
