Talks for MLB, the NBA and NHL to acquire the nation’s dominant owner of regional sports networks are faltering — raising the likelihood of a bankruptcy filing that could hasten a nationwide migration of sports fans away from cable TV, The NY Post reports.
Diamond Sports Group — which operates 21 Bally Sports-branded regional sports networks, or RSNs, that account for more than half the local broadcast markets around the country — has been in talks this fall to sell itself to the sports leagues for as much as $3 billion including debt.
But Diamond — a unit of Sinclair Broadcast Group — surprised investors on Nov. 28 by slashing its outlook for this year’s profitability in half as cord-cutting continues to dog the industry. Accordingly, the leagues no longer are willing to pay a premium in a buyout — and creditors are instead bracing to take their chances in bankruptcy court in the first half of next year, according to sources close to the talks.
That means Diamond’s slew of unprofitable broadcasting contracts will likely be rejected — and its decades-old, cable-TV-based business model will go out the window as deals are cut to stream lives games online, sources said. MLB could potentially step in as a temporary platform next year, but the streaming rights are expected to eventually end up with Big Tech companies like Apple, Amazon and Facebook, sources said.
Tech companies during the past few years have made inroads into live sports streaming. Amazon Prime, which hosts a handful of New York Yankees games exclusively, cut the biggest deal yet with a September deal to air NFL “Thursday Night Football” all season. Facebook and Apple TV+ also have acquired exclusive rights to some MLB games.
But a Diamond bankruptcy could open the doors for new level of dealmaking — and some insiders hope it will change the way people consume sports for the better. Many younger fans can’t watch games now because they don’t have cable, and some cable providers don’t even carry sports, the MLB owner griped.
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