MLB’s Houston Astros’ No. 26 Jose Siri steals second base against Atlanta Braves’ No. 7 Dansby Swanson in the eighth inning of Game 3 (Dansby Swanson) couldn’t catch a throw from No. 16 Travis d’Arnaud.
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Diamond Sports moved one step closer to emerging from bankruptcy after a bankruptcy judge on Thursday approved a restructuring plan that slashes the massive debt load that led to the company’s bankruptcy.
The green light is a major milestone for the owner of the regional sports network, which has been under bankruptcy protection since March 2023. And the business undergoes dramatic changes to its model to prove that it can be a viable company in the future.
“This is a very important day for this company. When we entered bankruptcy proceedings, I’m pleased to be able to tell you that I knew with confidence that we would restructure the business. I thought we would, but there was no way of knowing for sure. We can,” a lawyer for Diamond Sports said in court Thursday.
He continued: “We’ve had quite a journey to get here and potentially choose to close, but we’re here today to restructure this business.”
In the weeks leading up to the hearing, Diamond signed multiple agreements, including Amazon’Prime Video and naming rights deal for streaming games flutter’Fans duel.
Diamond recently faced opposition from Major League Baseball and the Atlanta Braves, but the company managed to resolve the issues ahead of a court hearing on Thursday. The company filed a reorganization plan with the court but faced longstanding opposition from the U.S. Trustee, the regulator overseeing the case. A judge on Thursday overturned the objections and approved the plan.
The restructuring plan, approved by the court on Thursday, will cut Diamond’s debt load from nearly $9 billion to $200 million. The company will emerge from bankruptcy with more than $100 million in cash and cash equivalents on its balance sheet.
“Today is a landmark day for Diamond as we embark on a new business path,” Diamond CEO David Preschlack said in a press release Thursday. “Diamond is now free from legacy debt and financially stable. and enthusiastically supported by new ownership.
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Throughout its bankruptcy process over the past year and a half, the company has seen the status of MLB, NHL and NHL teams change as they decide to either stay on the pay-TV network or exit to seek new deals.
Diamond Sports now owns local rights to 13 NBA teams, eight NHL teams and six MLB teams, lawyers for Diamond Sports said Thursday.
Its agreement with Major League Baseball (MLB) has received particular attention in the past few weeks. At an October court hearing, Diamond Said it plans to abandon all MLB teams except the Atlanta Braves unless contracts with them can be renegotiated.
Since then, MLS declare Three of the teams turned to Major League Baseball (MLB) to produce their local games, with the Texas Rangers parting ways with Diamond. The Cincinnati Reds also terminated their contract with Diamond, and the six MLB teams agreed to stay with him, attorneys said during Thursday’s hearing.
Diamond’s attorney said Thursday that the company is in talks with another team. According to an earlier report from CNBC, Diamond is working with 12 MLB teams, which leaves the Kansas City Royals as the unnamed team.
The Kansas City Royals did not immediately respond to CNBC’s request for comment.
The regional sports network business has proven to be a lucrative business model for teams and leagues for decades, as the networks pay top dollar to broadcast local games in order to shore up team payrolls. But similar to their peers in the pay-TV business, while those businesses remain profitable, they suffered heavy losses after the cable cut.
After Diamond went bankrupt, some teams opted out of Diamond-owned networks and signed deals with local broadcasters and various streaming platforms. While deals with local broadcasters will expand game coverage, they are unlikely to replicate the fees generated by the regional sports network model because they are not included in pay-TV bundles.
As Diamond negotiates with lenders and TV distributors, key discussions are with the league and teams. Some of those conversations are still ongoing, and Diamond’s lawyers said Thursday that the company is open to renegotiating with teams that have left.
“Our doors remain open, our phone lines remain open, and management is happy to engage with these teams if they want to rejoin them,” Diamond’s lawyer said in court Thursday.
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