Regional sports broadcaster Diamond Sports Group received U.S. court approval on Wednesday to begin voting on its bankruptcy plan, allowing it to move ahead with a debt-slashing deal while negotiating longer-term agreements with cable companies and sports leagues.
Reuters reports Diamond, a subsidiary of Sinclair Broadcast Group is pursuing a restructuring that would eliminate over $8 billion in debt and provide the company with additional funding from Amazon.as part of a streaming deal signed in January.
Diamond said in a statement that the court's approval is "another important step forward in our restructuring and we are working toward confirming our plan and emerging as a sustainable, go forward business."
Diamond recently signed a new long-term contract with the cable company Charter Communications and it hopes to build on that success by signing new deals with DirecTV and Comcast Hermann said. Contracts with those three companies provide more than 80% of Diamond's revenue, according to court documents.
Diamond, which broadcasts about 40% of regular-season baseball, hockey and basketball games in the U.S. through its Bally Sports-branded television channels, has not reached a bankruptcy deal with Major League Baseball.
The company has cut ties with two baseball teams during its bankruptcy, and it continues to broadcast games for 12 more teams. Diamond said it is not currently re-negotiating its MLB contracts.
MLB, which opposed Diamond's effort to stream more baseball games directly to fans online, said in an April 10 court filing that it has "serious concerns" about whether Diamond can become a sustainable business after its bankruptcy restructuring.
The NHL and the NBA also expressed concerns last week, saying that the uncertain status of Diamond's negotiations with cable providers made it difficult for the leagues to plan ahead beyond 2024.
At Wednesday's hearing, U.S. Bankruptcy Judge Christopher Lopez approved Diamond's request to begin voting on its plan, setting a May 22 deadline for votes and scheduling a June 18 hearing to consider final approval of Diamond's restructuring plan.
Diamond filed for bankruptcy in March 2023, caught between expensive broadcast rights agreements and a drop in revenue due to cord-cutting by sports viewers. The sports broadcaster had been headed toward a liquidation of its business before reaching a restructuring deal in January with its lenders, Sinclair and Amazon.
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