$3,000,000,000 Woes Amid Bankruptcy News Terrorizes 16 NBA Teams, as Per Latest Reports

In 2019, Sinclair Broadcast Group completed its acquisition of 21 regional sports networks, making its Diamond group the largest collection of regional sports networks in the country. This gave Sinclair exclusive local rights to 42 professional teams, including 14 Major League Baseball teams, 16 NBA teams, and 12 National Hockey League teams. The deal was worth $10.6 billion and did not include the YES Network, the New York-based sports network that carries Yankee games. As of now, there has been a big development related to this entire situation.

Since 2019, Sinclair has expressed interest in acquiring more regional sports networks, including the four that AT&T was expected to sell. Nonetheless, Sinclair’s acquisition of the regional sports networks in 2019 has cemented its position as a major player in the sports broadcasting industry, with exclusive rights to many of the country’s most popular professional sports teams.

Big three leagues consider joining forces to buy diamond sports amid financial woes

According to an article on New York post, MLB, the NBA, and the NHL may join forces to buy Diamond Sports, the owner of 21 regional sports TV networks. According to sources, the company is experiencing financial difficulties, and it may file for bankruptcy if it fails to find a buyer soon. However, the fees paid for sports broadcasting have decreased as cable TV providers have cut back on their offerings due to rampant cord-cutting, and satellite TV providers such as Dish have dropped out of regional sports networks. Diamond has been losing money ever since, and it may fetch only $3 billion including its debt, which is currently trading at a heavily-discounted $2 billion.

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Sinclair may propose giving over Diamond’s equity to creditors, who would then sell most of the operation to MLB, the NBA, and the NHL, while Diamond would retain a minority stake in the business. The three leagues are expected to engage in discussions with Diamond soon. If no agreement is reached, the company could be forced into bankruptcy in the next few months.

Implications of diamond sports’ potential bankruptcy on teams and broadcast rights contracts

While Diamond does have enough cash on hand to survive through next year, it is technically insolvent, and creditors may soon force it into bankruptcy. Hedge funds that have bought Diamond’s distressed debt are pressuring the company to call the liquidation question early, according to sources. Diamond has informed the leagues that if it goes bankrupt, it will still be able to broadcast games, but it will not need to pay teams their rights fees, as it will have protection from creditors.

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In a bankruptcy scenario, a buyer of the RSNs may decide to reject existing broadcast rights contracts that are too expensive and arrange for cheaper deals, insiders said. With some teams receiving up to 30% of their revenue from RSN rights, a prospective bankruptcy could affect team payrolls. MLB, for one, is prepared to broadcast games in local markets, charging cable companies the usual fees and passing the proceeds to team owners until Diamond emerges from bankruptcy.