Bankrupt broadcaster Diamond Sports, the nation’s largest regional sports network, has made a take-it-or-leave-it offer to cut rights fees to the NHL and NBA in a last-ditch bid to avoid liquidation, The NYPost is reporting.
The Sinclair subsidiary, which declared bankruptcy in March with $9 billion in debt, owns the broadcast rights to 15 NBA teams and 12 NHL teams as both leagues prepare to open their seasons next month.
Diamond proposed cutting the fees to both leagues by up to 20% ahead of a bankruptcy court-imposed Sept. 30 deadline, according to a source with direct knowledge of the situation.
Diamond pays NBA teams about $600 million a year in broadcast rights, which could amount to as much as a $120 million discount. Contract details with the NHL were not available
The NBA and NHL are leaning toward accepting the haircut, which would allow Diamond to survive for another year, the source said.
“This is a reorganization that will become a liquidation,” another source said.
Diamond will shut its doors but not until it makes some money from more profitable contracts so the creditors get some recovery, two sources said.
That also would help the NBA and NHL which are not well prepared for a liquidation, sources said.
Another possibility is Diamond would stop broadcasting games in markets where it is losing money if it cannot reach an overall deal with either the NBA or NHL, according to the first source.
The NBA is prepared to stream games that Diamond drops in their local markets if a deal is not worked out.
The loss of revenue may put a dent the NBA’s salary cap, which is partly determined by media rights fees, an NBA executive said.
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