- Diamond expected to file for bankruptcy after recently skipping a US$140m debt payment
- LA Clippers chairman Steve Ballmer hopes RSNs continue to show games after restructuring
The National Basketball Association (NBA) renewed its streaming agreement with the Diamond Sports Group (DSG), which operates the 21 Bally Sports regional sports networks (RSNs) and direct-to-consumer (DTC), according to the Sports Business Journal (SBJ).
The renewed deal is said to run until the end of the 2024/25 season and is the latest in a series of one-year extensions. SBJ reports that the deal terms contain a list of 13 conditions DSG must satisfy, with the NBA having committed to renewing the contract for a further 12 months should the media company succeed in doing so.
The outlet reports that DSG had met all 13 conditions last June, resulting in a contract renewal agreed with the NBA that allowed the Bally Sports+ to stream the in-market games for its 16 NBA franchise partners. The requirements are said to include the launch of a streaming service in Bally Sports+, as well as assurances that the company could continue to invest in the over-the-top (OTT) platform.
Another of the 13 demands states DSG’s RSNs must pay their affiliated NBA team a full rights fee. If DSG was to skip any rights payments to one of the teams then the NBA is empowered to take back all of its rights, as well as being free to launch a competing streaming service in the markets occupied by Bally Sports’ RSNs.
Bloomberg reported last month that DSG’s owner Sinclair is preparing the company for bankruptcy. DSG has subsequently missed a US$140 million debt payment, while also taking advantage of a 30-day grace period during which it will likely file for Chapter 11 bankruptcy and undertake a major debt restructuring. Should it file for bankruptcy, the DSG will have breached one of the conditions attached to its deal with the NBA.
However, the broadcaster’s plan however relies on the support of both the NBA and the National Hockey League (NHL), with Major League Baseball (MLB) appearing more likely to take back the rights. The NBA is yet to indicate its position, although Los Angeles Clippers chairman Steve Ballmer suggested last week that he hopes the RSNs continue to show games, adding that the league continues to update teams on DSG’s perilous situation.
“Will there be distribution of NBA games? Yes. Will that happen through the RSNs? I actually hope so. I hope so,” Ballmer told the Associated Press (AP).
“Will their bankruptcy be friendly enough for that to happen? I hope so. Will the creditors probably want our games to continue to get distributed? I think so. So somehow, I have faith without knowledge that we’ll get through this.”
Once DSG breaches its contractual condition by filing for bankruptcy – as expected – it puts the NBA in an intriguing dilemma on what to do with its digital rights.
Would it be best to leave the rights with DSG for the remainder of the contract’s duration, which would significantly aid its restructuring? Will taking back the rights be a better approach? These are the questions the league needs to consider next, with DSG heavily reliant on it remaining entrusted with the digital rights.
Interestingly, the deal with DSG expires at the same time the competition’s linear TV contracts with Turner and ESPN are also due to expire. Bundling the local digital rights with its national digital rights could create a desirable package for interested broadcasters. SBJ reports that the likes of Fox, NBC, Amazon and Apple are all mulling approaches for a package of NBA rights, alongside broadcast partners ESPN and Warner Bros Discovery, which owns Turner.