Bally Sports’ parent company files for bankruptcy weeks before Royals season begins
Shortly after the Royals’ spring-training game against the Cincinnati Reds began Tuesday night in Arizona, Diamond Sports Group announced it had filed for Chapter 11 bankruptcy protection.
Diamond, a subsidiary of Sinclair Broadcast Group, owns Bally Sports Kansas City, which was broadcasting Tuesday’s Royals game. In a news release, Diamond said it is looking to “eliminate over $8 billion of the Company’s outstanding debt.”
The news comes a little more than two weeks before the Royals begin the regular season, but Diamond said Tuesday’s move won’t affect broadcasts on the 19 regional sports networks it owns, including Bally Sports KC.
“DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love,” Diamond CEO David Preschlack said in the news release. “With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company.”
The company added it has roughly $425 million to use for its business needs and restructuring.
Tuesday night’s filing was expected. Diamond had missed a payment of $140 million in interest that had been due in February.
At that time, the Royals issued a statement to The Star saying that its games would be available to fans regardless of Diamond’s financial issues.
“MLB has been focused on this and has a variety of contingencies in place to make sure fans have access to our games,” the Royals wrote. “We’ve had numerous conversations with MLB, and there is no higher priority.”
The New York Post reported Sunday that Major League Baseball had unsuccessfully attempted to purchase the rights to the regional sports networks owned by Diamond.
But there have been no negotiations between Diamond and MLB in weeks, the Post said.
Diamond’s pronouncement Tuesday that it would continue broadcasting games on its regional sports networks like Bally Sports Kansas City may have been made to placate MLB commissioner Rob Manfred.
After Diamond said in February it would miss the interest payment, Manfred made it clear that MLB was ready to wrest control of the broadcasts if even one payment to a team was missed.
“We’ve been really clear that if Diamond doesn’t pay, under every single one of the broadcast agreements, that creates a termination right, and our clubs will proceed to terminate those contracts,” Manfred said, per Yahoo Sports. “In the event that MLB stepped in, what we would do is we would produce the games, we would make use of our asset, the MLB Network, to do that. We would go directly to distributors — meaning Comcast, Charter, the big distributors — and make an agreement to have those games distributed on cable networks.
“We would also be seeking flexibility on the digital side, so that when you look at MLB.TV, you’d go in, you can buy your out-of-market package like you’ve always had, but you would have the option to buy up into in-market games, which I see as a huge improvement for fans.”
The Royals signed a new television contract in 2020with Fox Sports Kansas City, which later became Bally Sports KC. MLB.com reported at that time that the deal was worth $48 million to $52 million per year over a six- to eight-year period.
