Diamond Sports Group Skips $140M Debt Payment as Bankruptcy Looms for Owner of Bally Sports RSNs

The Sinclair subsidiary will continue producing live sports broadcasts while addressing its balance sheet

In a move that has been widely expected, Diamond Sports Group — the largest owner of regional sports networks in the U.S. — announced that, to “maximize its financial flexibility,” it will skip a $140 million debt payment scheduled to be paid today. DSG, an independently managed subsidiary of Sinclair Broadcast Group (SBG) and owner of all 19 Bally Sports RSNs, will enter the 30-day grace period in which the company is expected to file for bankruptcy reorganization.

Diamond Sports Group owns and operates 19 Bally Sports RSNs throughout the U.S.

According to the statement, DSG expects to continue business operations as usual and broadcast live sports productions “while it addresses its balance sheet.” The company intends to use the 30-day grace period to continue discussions with creditors and other key stakeholders on strategic alternatives and positioning for the future.

According to Sportico’s in-depth report, the company is unlikely to make the payment during the grace period and is expected to negotiate with creditors to prepare a “prepackaged” Chapter 11 filing to reorganize the business and its nearly $9 billion debt. In filing for Chapter 11 bankruptcy protection, DSG would need to detail a schedule for repaying creditors and a plan on how it would continue operations — including live sports broadcasts.

Diamond RSNs produce approximately 5,000 live local professional telecasts each year, in addition to a wide variety of locally produced sports events and programs. Besides the 19 owned-and-operated Bally Sports RSNs, DSG also has a joint venture with Marquee Sports Network (home of the Chicago Cubs) and a minority interest in YES Network (home of the New York Yankees and Brooklyn Nets).

Sinclair Broadcast Group acquired the RSNs from Walt Disney Co. in 2019 (after the U.S. Department of Justice forced Disney to sell the RSNs following its acquisition of the bulk of 21st Century Fox assets) in a debt-heavy $9.6 billion deal. Since then, Diamond Sports Group has had to navigate a quickly dwindling cable-subscriber base that has hit RSNs the hardest, as well as a litany of other pandemic-related challenges.

Stay tuned to SVG for further reports on this story and its impact on the live–sports-production industry.