The Broadcaster of NBA, NHL and MLB Local Games Sues Its Parent Company Under the Accusations of Fraud

Published 08/28/2023, 8:41 AM EDT

Diamond Sports Group is ready for an all-out war with its parent company. Sinclair Broadcasting Group have hit an iceberg as they face legal charges. Diamond sports group is accusing its parent company for possible fraudulent activities.

According to the lawsuit, Sinclair is accused of siphoning off approximately $1.5 billion from Diamond Sports through deceitful practices. This legal action was recently made public.

The Lawsuit against the Parent Company

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Diamond Sports is recognized for broadcasting local NBA, NHL, and MLB games via its “Bally Sports” channels. The company alleges that Sinclair initiated the diversion of its assets shortly after acquiring it in 2019. The lawsuit suggests that Sinclair was aware of Diamond Sports’ forthcoming financial struggles due to a decline in revenue from cable and satellite television subscriptions. These actions by Sinclair are claimed to have adversely affected both Diamond Sports and its creditors, leading to allegations of fraudulent intent.

The lawsuit was officially filed in a U.S. bankruptcy court in Houston, Texas. It portrays Sinclair as taking advantage of Diamond Sports’ vulnerable financial position for its own gain. The lawsuit states, “Throughout this period of rapid decline, Sinclair relentlessly pursued its plan to extract value from Diamond for Sinclair’s benefit, salvaging whatever it could before Diamond’s inevitable bankruptcy.”

Sinclair vehemently denies these allegations and insists that Diamond Sports’ claims lack substantial basis. Sinclair is determined to strongly defend itself against these accusations. It’s worth noting that Sinclair was already aware of Diamond Sports’ confidential lawsuit, which had been filed earlier.

Sinclair and the Connection with Diamond Sports Group

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Sinclair’s acquisition of Diamond Sports Group, previously associated with the “Fox Sports” brand, was a significant transaction amounting to $10 billion. This transaction played a role in facilitating Disney’s acquisition of Twenty-First Century Fox Inc.’s film and television assets.

Furthermore, the lawsuit contends that Sinclair expeditiously tapped into Diamond Sports’ financial resources to offset a portion of the expenses associated with the acquisition. Subsequently, Sinclair is facing allegations of demanding disproportionately high management fees from Diamond. Moreover, Sinclair is accused of retaining a significant portion of the proceeds stemming from a deal that ultimately led to the rebranding of Diamond’s channels as the now-familiar “Bally Sports.”

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In the month of March, Diamond Sports Group took the initiative to initiate proceedings for bankruptcy. This move was undertaken with the primary objective of arriving at a settlement with the organization’s lenders. This led to subsequently reevaluating its contractual agreements within Major League Baseball (MLB). Amidst these financial developments, Diamond Sports places immense emphasis on securing the rights. It will allow them to stream baseball games online. This strategic decision is aimed at counteracting the substantial loss in revenue that has manifested as a consequence of the considerable decline in the number of cable subscriptions.

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Written by:

Naman Singh is a writer at EssentiallySports who covers Sports Viral Moments. His arsenal is well-rounded and he surely knows how to keep the readers engaged. Naman is interested in covering live events, as well as the off-court drama that comes with it.

Edited by:

Priyadarshini Ajay

The Broadcaster of NBA, NHL and MLB Local Games Sues Its Parent Company Under the Accusations of Fraud

The Lawsuit against the Parent Company

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Sinclair and the Connection with Diamond Sports Group