Diamond Sports Broadcasting Group Declaring Bankruptcy Next Week, Impacting MLB, NBA and NHL

The corporate group behind Bally Sports is planning to declare bankruptcy next week, according to a new report.

Diamond Sports, which operates 19 regional sports networks covering over 40 professional teams, has been struggling financially despite the major properties they control.

Rumors had emerged a few weeks ago that bankruptcy could be a possibility.

READ: BALLY SPORTS OWNER NEARING BANKRUPTCY; LOCAL DEALS WITH SPORTS LEAGUES COULD BE IMPACTED

Now, Sportico has reported that bankruptcy could be coming for Diamond Sports as soon as next week.

According to the report, Diamond has “$140 million in interest payments due next week. Instead of meeting them, it is planning to file Chapter 11 next week.”

The looming bankruptcy could have severe ramifications for any number of professional teams. Major League Baseball in particular could be heavily impacted, given the number of franchises with Bally Sports deals.

HOUSTON, TEXAS - OCTOBER 29: Commissioner Robert D. Manfred Jr. on the field prior to Game Two of the 2022 World Series between the Houston Astros and the Philadelphia Phillies at Minute Maid Park on October 29, 2022 in Houston, Texas. (Photo by Bob Levey/Getty Images)

Diamond Sports Bankruptcy Has Massive Implications

Affected organizations will have any number of important questions. But one of the most pressing revolves around what happens to their distribution payments during the Chapter 11 process.

Most teams receive huge chunks of their revenue from media rights payments. If Diamond is unable to meet their obligations during bankruptcy, what happens to their bottom line?

This also will have ramifications for local media rights bidding down the road.

Diamond’s initial deal was heavily leveraged, but this may still put a stop to runaway growth in sports-related television rights.

On the flip side, one piece of good news is that MLB may find it easier to eliminate their arcane blackout rules.

READ: MLB MAY SOON TRY TO ELIMINATE LOCAL AREA BLACKOUTS

Commissioner Rob Manfred told the Associated Press recently that the league would be “prepared to make games available via both digital and traditional cable avenues” if Diamond can’t.

The league has long wanted to adjust their distribution strategy, and this bankruptcy could help create that opportunity.

There will certainly be further fallout as the sports world learns more about the implications of Diamond’s collapse. Stay tuned.