Collapse of Regional Sports Networks (Diamond Sports Group files bankruptcy, Warner-Discovery looking to leave business, Xfinity drops Bally)

[StreetHawk]

Good find sums it up perfectly. Courts hold all the power here not Leagues or Diamond but Diamond is afforded protections under law aka [a league isn't going to just take back their rights not without Diamond offering to do so or a compelling case for the court to deem a league taking them back.]

Passage from the article

The automatic stay is perhaps the most powerful tool afforded to the bankrupt company. The protection allows Diamond to maintain its assets, most notably its TV sports rights, to keep its business afloat as it attempts to figure out a way to pay its creditors, reduce its expenses, potentially raise more cash, and fulfill, amend, or shed their TV contracts with clubs.

"Once you file bankruptcy, no one can take any action to collect a debt against you unless you go get court permission," Markell said. "The goal of Chapter 11 is for there to be a plan of reorganization, which is a document detailing who gets what, and who does what."

The automatic stay also means that creating that plan takes a while to play out. "Dealing in bankruptcy, a lot of times, is getting used to watching slow-motion crashes," he said.

We've seen a couple of bankruptcies in the NHL with Pitt, AZ, etc. so the NHL has been through this before, just on the other side to protect the club from their creditors. This time around, the NHL and their teams are the creditors.

Is something going to be resolved before the next NHL season begins in October? Doesn't sound like that is likely for the teams impacted by Bally's.

 

[eddygee]

We've seen a couple of bankruptcies in the NHL with Pitt, AZ, etc. so the NHL has been through this before, just on the other side to protect the club from their creditors. This time around, the NHL and their teams are the creditors.

Is something going to be resolved before the next NHL season begins in October? Doesn't sound like that is likely for the teams impacted by Bally's.

Doubtful

 

[Headshot77]

Bankruptcies can take years to resolve. Many teams have RSN rights deals that are 10-15 years long. This is gonna be a slow collapse.

 

[Yukon Joe]

Nope not at all we're talking in circles. MLB can want to and prepare to do anything they want.

That's not the same as making it happen. The power lies in the court not MLB/NBA/NHL. That's what im trying to say once again. Some ppl get this sense because of MLB PR pieces that they're dictating and in control. The power is in the court, they will give what they deem as fair judgment/recourse and consider all circumstances. As @mouser alluded to they can (ASK) the court to do XYZ and Diamond can also ask the court to do XYZ. Diamond does already have some Business protectorate though through Chapter 11 Bankruptcy law.

It's not just a formality of oh MLB or any affected league can just snap their fingers do their plan they came up with and it's all solved. NOPE not that simple. John Ourand had a thorough sourced report a month ago his sources said this will be a long drawn out process think he said potentially up to 5yrs of what he called the short term pain period. Chapter 11s aren't quick by nature. Sometimes they take years through the restructuring plan. Remember Kmart they had the longest drawn out Chapter 11 restructuring before finally going belly up a few yrs ago.

The best recourse would be both sides coming to some sort of fair agreement. From this case and point that favors Diamond as they are on the losing side currently. So likely result is courts rule in favor of partial payments/reductions while the restructing process occurs.

Bankruptcy court has a lot of power - but not unlimited power.

The primary issue here is DIamond has to pay $X in rights fees, and now says it can't afford those rights fees.

Now the bankruptcy court can break the contract between Diamond and MLB. It can also write-down any debts that Diamond has. But what the bankruptcy court can't do is force MLB to accept a lesser amount of money and keep the rights deal in place.


Chapter 11 can be drawn out for years - but that's only to get everything sorted out and finalized. If Diamond isn't paying the rights fees that will get sorted out one way or another relatively quickly (weeks/months, not years).

 

[eddygee]

Bankruptcy court has a lot of power - but not unlimited power.


Now the bankruptcy court can break the contract between Diamond and MLB. It can also write-down any debts that Diamond has. But what the bankruptcy court can't do is force MLB to accept a lesser amount of money and keep the rights deal in place.

Not sure the bolded part is correct at least based on John Ourand's reporting a month ago. He said (paraphrasing)based off his understanding from people who understand Bankruptcy law the Bankruptcy Courts can look at the existing deals and see if they are now currently meeting fair market value ie.do the deals under current terms. If not they will set a amount to be paid. They work in tandem with all sides and give a judgement.

This I buy it's no different than credit repair(different circumstance) where a repair agency works out a agreement with the debtor and creditor for lower agreed paid amount. If only it was as simple as MLB etc league saying we're not accepting lower payment lol. That defeats the whole concept of Chapter 11 Bankruptcy. This is part of the whole protections in law afforded to a Chapter 11 Bankruptcy filers. The leagues WILL likely receive lower payments. They won't like it.

 

[Golden_Jet]

Not sure the bolded part is correct at least based on John Ourand's reporting a month ago. He said (paraphrasing)based off his understanding from people who understand Bankruptcy law the Bankruptcy Courts can look at the existing deals and see if they are now currently meet fair marker value and re do the deals under more favorable terms.

That’s one option.

 

[eddygee]

That’s one option.

Yeah but edited typos. I think there are different paths NBA/NHL seem to be far more amenable to working something out with Diamond. IMO it comes down to how the two viewpoints are viewing things. NBA/NHL may see it far better to work within the existing structure and risk taking a less than collapsing the whole system creating risk. While MLB may have weighed the ship is going down so its better to rip off the bandaid they can vs keeping things going.

It's really a matter of viewpoint.

 

[Headshot77]

ATT Sportsnet is set to shut down in 2 days and still crickets from the Penguins. Really interesting.

 

[wildthing202]

ATT Sportsnet is set to shut down in 2 days and still crickets from the Penguins. Really interesting.

Penguins to NESN?

 

[LadyStanley]

ATT Sportsnet is set to shut down in 2 days and still crickets from the Penguins. Really interesting.

VGK has announced their games will be available for the rest of the season.

 

[CHRDANHUTCH]

Penguins to NESN?

depends on the Pirates but unlikely since cross ownership.... FSG cannot own multiple teams in different markets even if NESN is owned by FSG

 

[patnyrnyg]

YES Network App will be available direct to consumer beginning tomorrow in the Yankees broadcast area. $24.99/mo. Also have an annual rate, but forgot it. Was just said on WFAN.

 

[Headshot77]

depends on the Pirates but unlikely since cross ownership.... FSG cannot own multiple teams in different markets even if NESN is owned by FSG

FSG doesn't need to own the Pirates to broadcast their games on their network. That should be 100% fine. All they gotta do is spin it off as "NESN Pittsburgh" and you're golden.

 

[CHRDANHUTCH]

FSG doesn't need to own the Pirates to broadcast their games on their network. That should be 100% fine. All they gotta do is spin it off as "NESN Pittsburgh" and you're golden.

Bally San Diego has already been paid by DSG..... it has nothing to do w/ NESN OR FSG.... because you cannot operate two franchises in different markets without selling one..... since FSG owns both the RSN and Boston.... it's why the rule exists.... you keep forgetting since when does FSG Own the Penguins 100% WHEN Mario bought them out the last BK.... ALL FSG is a financial partner.... just as they are with RFK Racing

 

[sh724]

Bally San Diego has already been paid by DSG..... it has nothing to do w/ NESN OR FSG.... because you cannot operate two franchises in different markets without selling one..... since FSG owns both the RSN and Boston.... it's why the rule exists.... you keep forgetting since when does FSG Own the Penguins 100% WHEN Mario bought them out the last BK.... ALL FSG is a financial partner.... just as they are with RFK Racing

What league has that rule? AFAIK, the NFL is the only league that ever had that rule and they got rid of it not too long ago. I dont recall that being an issue with any other league.

 

[CHRDANHUTCH]

What league has that rule? AFAIK, the NFL is the only league that ever had that rule and they got rid of it not too long ago. I dont recall that being an issue with any other league.

business-wise.....wasn't the original point nothing changes legally..... there's no competitive advantage for NESN to enter the Pittsburgh market.... because NESN is part of the operations when FSG bought the Sox from the Yawkey Trust.... nothing changed when that transaction was being vetted..... same here unless DSG misses payments.... which they haven't in San Diego

 

[Headshot77]

Bally San Diego has already been paid by DSG..... it has nothing to do w/ NESN OR FSG.... because you cannot operate two franchises in different markets without selling one..... since FSG owns both the RSN and Boston.... it's why the rule exists.... you keep forgetting since when does FSG Own the Penguins 100% WHEN Mario bought them out the last BK.... ALL FSG is a financial partner.... just as they are with RFK Racing

Then how does James Dolan own the Rangers, yet his MSG network airs the Islanders, Devils, and Sabres? Fenway Sports group bought a majority stake in the Pens; Lemieux is on as a "face" of sorts but he owns less than 10% of the team now (tbh I'm not sure how much exactly). Fenway has no ownership of the Boston Bruins, just the cable deal via their RSN (NESN). It's 100% acceptable in the NHL and MLB bylaws for them to distribute Bruins games while owning the Pens, and distributing Pirates games while owning the Red Sox. Perhaps something has to be spun off, like the RSN side of the business has to become a separate LLC, but if this wasn't a legal way to do business then James Dolan has been breaking NHL bylaws for decades.

 

[CHRDANHUTCH]

Then how does James Dolan own the Rangers, yet his MSG network airs the Islanders, Devils, and Sabres? Fenway Sports group bought a majority stake in the Pens, Lemieux is on as a "face" of sorts but he owns less than 10% of the team now (tbh I'm not sure how much exactly). Fenway has no ownership of the Boston Bruins, just the cable deal. It's 100% acceptable in the NHL and MLB bylaws for them to distribute Bruins games while owning the Pens, and distributing Pirates games while owning the Red Sox. Perhaps something has to be spun off, like the RSN side of the business has to become a separate LLC, but if this wasn't a legal way to do business then James Dolan has been breaking NHL bylaws for decades.

wrong..... who owns FSG, John Henry Headshot..... the same ownership owns both Boston and NESN..... FSG only bought Pittsburgh because Delaware North, Based in Buffalo, btw, said the Bruins weren't for sale....DN is a minority owner in NESN.... which is why Boston is split 80/20, hence the creation of NESN + when both seasons overlap otherwise, Bruins has no TV Network nor does NESN have programming once the Sox are out of season;

DN is now solely in the hands of the Jacobs family.... it's Charlie Jacobs who now is the prominent member of said family visible to run the Bruins....

as to Buffalo being added to MSG, that was a result of John Rigas.... and the collapse of Adelphia Communications.... which is why Time Warner acquired most of those assets.... as did Charter aka Spectrum does currently in New England

 

[Headshot77]

wrong..... who owns FSG, John Henry Headshot..... the same ownership owns both Boston and NESN..... FSG only bought Pittsburgh because Delaware North, Based in Buffalo, btw, said the Bruins weren't for sale....DN is a minority owner in NESN.... which is why Boston is split 80/20, hence the creation of NESN + when both seasons overlap otherwise, Bruins has no TV Network nor does NESN have programming once the Sox are out of season;

DN is now solely in the hands of the Jacobs family.... it's Charlie Jacobs who now is the prominent member of said family visible to run the Bruins....

as to Buffalo being added to MSG, that was a result of John Rigas.... and the collapse of Adelphia Communications.... which is why Time Warner acquired most of those assets.... as did Charter aka Spectrum does currently in New England

Okay, so the Bruins are owned wholely by Jacobs via Delaware North, and they have a 20% stake in NESN.

John Henry via FSG owns the Red Sox and Penguins and 80% of NESN, yes? I don't see the conflict here. There's no one person who has an ownership stake in both teams. I'm reasonably confident in saying that ownership groups can co-own RSN groups. That's just distribution of games, not actual team management. That's not against the spirit of competition or anything.

 

[IU Hawks fan]

What is going on here?

There's nothing that would prevent NESN from launching in Pittsburgh. They would only carry Pens games, obviously, and getting carriage would be the biggest hurdle.

 

[varsaku]

Bally Sports North reportedly lost more than half its subscribers in last decade

Per the report, there were 2.9 million subscribers to the regional sports network in 2013 (branded Fox Sports North at the time) compared with just 1.2 million subscribers to Bally Sports North now. That includes a staggering 1.4 million subscribers lost in just the last five years alone. Other markets saw large decreases in subscribers as well.

Wow, that is a huge decrease. Will be interesting to see what other regions lost.

 

[varsaku]

Sinclair’s Diamond Sports files Chapter 11 bankruptcy

According to documents reviewed by The Desk, Sinclair and Diamond Sports’ largest creditors are:

• U.S. Bank: $1.8 billion
• Dolan Broadcast: $77.2 million
• DirecTV: $40.1 million
• Arizona Diamondbacks: $30.8 million
• Intelsat: $15 million
• Raycom Sports: $8.53 million
• Home Team Sports: $5.1 million
• Harte-Hanks: $248,000
• Evergent: $170,000
• Mercury Sports: $143,000
• Minor Vices, Inc: $122,500
• VITAC: $101,000
• Think Systems: $80,700
• Getty Images: $54,500
• TecVeris: $54,000
• IATSE National Benefit Fund: $52,600
• Creative Artists Agency: $50,000
• Checkmate Media: $44,500
• West Agile Labs: $30,300
• Buffalo Sabres/Hockey Western: $30,100
• MSG Networks: $27,000
• Ease Live: $26,000
• Amazon Web Services: $24,000
• Sirius Computer: $23,700
• AT&T: $22,300
• Worldlink Ventures: $12,000
• Imagn Content Services: $10,000
• GTG Network: $9,200
• XLT Management: $7,200
• SBX Agency: $6,000

 

[Goalie_Bob]

I see no reason why NESN couldn't carry the Pens games and Pirates games. Desperate times call for desperate measures and I could see the rules being allowed to be bent for the next season to make sure that teams can broadcast their games.

IMO, it would be pretty obvious that the Red Sox and Pirates aren't sharing money or resources.

 

[Spydey629]

Whatever is happening is going on behind well closed doors... the Pirates broadcast had several promotions for their next few games "all on AT&T SportsNet", and the Pens broadcast made a big deal about their "Bucs and Pucks" double-header on Sunday.

From what I can tell, the channel isn't going dark just yet. It is more waiting for a new owner to come in. Whether that is FSG, FSG and Bob Nutting, or some other group is what has yet to be determined.

 

[mouser]

Signs Diamond may be trying to cut or reduce some of their worst contracts while retaining others. The Cleveland contract was reported earlier as one of the worst values.