Under the bankruptcy plan, Diamond will become a separate company and will use the Chapter 11 process to shed US$8 billion in debt by converting debt to equity.
Diamond said that it expects that its Bally Sports regional sports networks will continue to operate in the ordinary course during the Chapter 11 process. The company maintains that it is well capitalized with approximately US$425 million of cash on hand to fund its business and restructuring.
“The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the Company for long term success and has determined that the best path forward for the Company and its stakeholders is to restructure through a Chapter 11 process. We are utilizing this process to reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt. The financial flexibility attained through this restructuring will allow DSG to evolve our business while continuing to provide exceptional live sports productions for our fans,” said CEO David Preschlack.
“DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love. With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company.”
“We deeply appreciate the hard work and commitment of our employees, who remain focused on producing high quality sports games that our fans have come to expect. We look forward to working constructively with our team and league partners and all DSG stakeholders throughout this process and beyond.”
News of the bankruptcy and agreement with creditors, which was widely expected, will likely be welcomed by US sports teams that derive large amounts of income from the country’s struggling regional sports networks.
Sinclair had purchased the Bally Sports networks – then Fox Sports – from Fox in 2019 for US$10.6 billion. The heavily indebted networks suffered a blow two years ago when Dish Network declined to license the sports channels.
The New York Post reported this week that Diamond could use the bankruptcy to withdraw from contracts with some Major League Baseball teams with rights deals that do not deliver a return from cable carriage deals and advertising, leading the MLB to stream the games on its own platform.
Source : Digitaltv