Sinclair Broadcast Group Inc. is evaluating investor proposals on how to rework the debt load of its regional sports network unit as it also prepares to ink new deals with sports betting companies, according to Bloomberg citing people with knowledge of the matter.
The unit, Diamond Sports Group LLC, has received offers from debt investors seeking to provide new financing in exchange for enhancing creditor protections, said the people, who asked not to be identified discussing confidential talks. The company is having active discussions with representatives for those groups, the people added.
Diamond has also received interest from outside firms that aren’t currently involved in the company’s debt but have expressed interest in providing financing, one of the people said. The discussions with creditors and potential new investors are ongoing and likely to evolve in the coming days, the people added.
Cash that comes from increased advertising dollars and naming rights associated with the Bally’s deal and the potential new partners is meant to support the Diamond unit, the people said.
Diamond Sports has faltered since Sinclair Broadcast Group Inc. bought the collection of regional sports networks from Walt Disney Co. in 2019 for $9.6 billion. The deal was financed with costly high-yield debt that fell to distressed levels as the company struggled to sign and maintain deals with carriers and dealt with the pandemic’s disruptions to live sports. Sinclair later wrote down its investment by $4.23 billion.
A debt proposal unsecured creditors sent last week included providing at least $500 million of new money into the company and exchanging their bonds for new debt with tighter covenants and equal in priority for repayment to existing secured debt, one of the people said.
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