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Television Contracts Newsbeat

Tuesday, February 14, 2023

WBD-OWNED RSNS FAIL TO MEET RIGHTS-FEE OBLIGATIONS TO MLB PARTNERS

While Diamond Sports Group appears set to default on $140 million in interest payments, a move which is expected to trigger a bankruptcy filing in the coming weeks, its 19 Bally Sports properties aren’t the only RSNs feeling a financial pinch. According to multiple league, finance and network sources, the three AT&T SportsNet brands in recent weeks have handed over lighter-than-expected envelopes to their respective MLB franchise partners.

An executive with direct knowledge of the RSNs’ financial dealings confirmed to Sportico that the AT&T outlets in Denver, Houston and Pittsburgh submitted their most recent rights payments to their MLB clubs in a timely fashion, although the disbursements were not commensurate with the contracted rates. The teams impacted by the shortfall are the Colorado Rockies, Houston Astros and Pittsburgh Pirates.

The precise amount of the funds withheld is not known but is said to be significant enough to have catalyzed concerns about the long-term viability of the three networks. According to one insider, the partial payments may be interpreted as a signal that new-ish owners Warner Bros. Discovery are eager to get out of the RSN business.

 


Wednesday, January 25, 2023

Sinclair’s Sports Channels Prepare Bankruptcy, Putting Team Payments at Risk

America’s largest owner of local sports channels is heading toward a complex $8.6 billion debt restructuring in bankruptcy court as it stakes its future on a new direct-to-consumer streaming service.

After leveraging up to buy regional sports networks from Walt Disney Co. in 2019, Diamond Sports Group LLC is suffering from a decline in cable-TV subscribers, spurring negotiations with creditors and major sports leagues about its viability as a going concern. The outcome will have serious implications for the $55 billion world of sports-media rights: the company’s channels showcase Major League Baseball, National Basketball Association and National Hockey League games to fans from Detroit and Phoenix to San Diego.

With financial troubles mounting, the Sinclair Broadcast Group Inc.-owned firm will likely skip $140 million in interest payments due mid-February, kickstarting a 30-day grace period, according to people familiar with the matter. A stark divide is emerging between would-be winners and losers: its $630 million first-lien loan is trading at 92 cents on the dollar, while nearly $5 billion of lower-ranked bonds change hands for under 10 cents — signaling a near-total wipeout for subordinated creditors.

How all this goes down matters. If Diamond, which operates under the Bally Sports brand, files for bankruptcy, it could potentially put at risk crucial broadcasting-rights revenue for the likes of MLB.

 

RoyalsRetro (AG#1F) Posted: January 25, 2023 at 04:05 PM | 26 comment(s)
  Beats: regional sports networks, sinclair, television contracts

 

 

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