(Bloomberg) -- Diamond Sports Group won court approval of a restructuring plan that hands control of the bankrupt sports broadcaster to lenders and blesses a multi-year agreement to stream games on Amazon.com Inc.’s Prime Video channels.
The deal approved Thursday by Judge Christopher Lopez trims about $8 billion in debt from Diamond’s balance sheet and clears its path to emerge from bankruptcy after filing Chapter 11 in March 2023. The broadcaster now is also poised to complete a separation from Sinclair Inc., its owner via the acquisition of 21 regional sports networks from Walt Disney Co. in 2019 in a debt-fueled deal once valued at $10.6 billion.
The company, which had operated under the Bally Sports brand, also struck a new naming rights deal in Chapter 11 with betting giant FanDuel Inc. It will now be known as the FanDuel Sports Network.
The restructuring represents a major turnaround for Diamond, which late last year neared a shutdown after struggling with substantial debt and a loss of customers who switched to streaming services.
But the company struck a series of agreements to stay in business, including accords to continue broadcasting National Basketball Association and National Hockey League games. Lawyers said Thursday it also has deals to keep broadcasting a half-dozen Major League Baseball teams.
Diamond lawyer Brian Hermann said the company not only had to fix a bad balance sheet, but a business that was in turmoil amid changes in how consumers watch local sports broadcasts. He said Thursday that the company took “a pretty twisted journey to get here.”
Credit Takeover
Major creditors poised to take over the business include Alta Fundamental Advisers LLC, Hudson Bay Capital Management LP, PGIM Inc. and Oaktree Capital Management LP, according to a September court filing. Lawyers representing the firms in Diamond’s bankruptcy didn’t immediately respond to a message seeking comment after Thursday’s hearing.
Prior to the court proceeding, Diamond had resolved disputes with MLB. Baseball Commissioner Rob Manfred testified last year about a tense meeting with Sinclair Executive Chairman David Smith and the league had earlier challenged Diamond’s restructuring plan. Lopez earlier denied Diamond’s request to reduce fees it owes MLB teams.
Diamond used Chapter 11 protection to end broadcast deals with a handful of teams, including the Arizona Diamondbacks, San Diego Padres and Texas Rangers. The company said Thursday it has made agreements to continue broadcasting games of six clubs, including the Los Angeles Angeles, St. Louis Cardinals and Atlanta Braves.
The restructuring plan saves jobs and benefits sports fans, Lopez said.
“Hardcore fans are hardcore fans and they want to see their teams play and rooting for it is just as much a part of the American experience as anything else,” the judge said.
The case is Diamond Sports Group LLC, 23-90116, U.S. Bankruptcy Court, Southern District of Texas.
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