- Suns and Mercury had announced plans to air games on FTA TV and new DTC platform
- DSG claims it still has right of first refusal if teams signed deals with other broadcasters
The Phoenix Suns and Phoenix Mercury are being sued by Diamond Sports Group (DSG), with the bankrupt regional sports network (RSN) operator attempting to block the National Basketball Association (NBA) and Women’s National Basketball Association (WNBA) teams’ plans to create a new streaming service.
The Suns and Mercury recently announced they would not renew their local rights deal with DSG, instead signing a deal offer live matches on Gray Television’s free-to-air (FTA) local TV stations in Phoenix, Tucson and Yuma. A new direct-to-consumer (DTC) platform was also announced, with the launch to be carried out in conjunction with streaming specialist Kiswe.
In its initial response, DSG claimed the deal violated bankruptcy law and its agreement. It has now followed up its statement with a lawsuit against both basketball teams, as well as against Gray and Kiswe.
‘The Suns’ failure to comply with their contractual duties, and Diamond Arizona’s potential loss of approximately 70 games of NBA content provided by the Suns each season, puts Diamond Arizona’s business at significant peril, thereby directly threatening its ability to reorganise,’ DSG’s emergency motion states.
‘The Suns’ deliberate disregard of its contractual duties to Diamond Arizona is specifically the type of action the automatic stay is meant to protect against.’
DSG’s motion also says the Sinclair subsidiary warned the Suns and Gray of these issues prior to last week’s announcement, and is now alleging tortious interference against the teams’ new local media partners. It also claims its contract with the NBA franchise is technically still in place despite it being set to run out after this season, which would mean DSG still has the right of first refusal should the Suns sign a deal with another broadcaster.
The RSN operator not only wants the court to void the Suns’ and Mercury’s new agreements, but is intent on suing the teams and its two partners, with these adversarial proceedings potentially leading to a trial if not settled.
“Nobody is surprised by this lawsuit and it will not stop the Phoenix Suns and Mercury from making our games available to as many people as we possibly can,” Mat Ishbia, the owner of both the Suns and Mercury, said in response to the lawsuit.
“The fans, players, and everyone in our organization knows this is how all of us win together, on and off the court. I firmly believe the future success of the NBA and WNBA is about getting our product to everyone who wants it versus just the people who pay for it.”
DSG’s lawsuit comes as no surprise, given its impassioned and furious response to the Suns’ and Mercury’s announcement.
The company, which operates 19 RSNs under the Bally Sports banner, declared for bankruptcy in March. It is being primed to be spun off from Sinclair as part of a restructuring, with the goal of retaining its local rights while also launching its DTC service Bally Sports+ in more markets.
Its Arizona RSN currently serves as a one-stop shop for regional fans, given it also owns the rights to games featuring Major League Baseball’s (MLB) Arizona Diamondbacks, whom DSG reportedly failed to pay its rights fee to on time back in March, and the National Hockey League’s (NHL) Arizona Coyotes.
The Suns’ and Mercury’s new agreement plans to expand the number of households able to watch live games to 2.8 million. The hybrid approach of mixing FTA and DTC coverage is seen as an innovative approach that could inspire other teams to agree a similar arrangement. For now though, DSG appears unwilling to acquiesce to the teams’ bold plans.