Sinclair reportedly hires investment banks in potential lead-up to sale of Bally Sports RSNs

Ourand detailed why the banks were hired, noting they were “working to improve the sports group’s capital structure.”

The bankers have not reached out to potential bidders yet. Instead, they are working to improve the sports group’s capital structure to make it more attractive to potential suitors or investors, sources said. It’s unlikely that the bankers will find buyers or investors — at least not right away — because Diamond Sports Group is operating with upwards of $8 billion in debt.

The problem: creditors will not want to restructure until they have an idea who likely buyers are. But buyers will be scared away until the bankers can make the company’s balance sheet look more attractive. The bankers have to try and serve both masters at the same time.

One option that apparently is on the table: the bankers could try to persuade creditors to forgive debt, convert it to equity and try to bring in a partner — either one of the leagues or a deep-pocketed tech or media company like Apple, Amazon, Fanatics or DraftKings.

Sinclair bought the RSNs from Disney in 2019 for nearly $10 billion. Since then, the RSNs have been plagued by carriage disputes and the pandemic. In late 2020, Sinclair took a writedown of $4.2 billion on the RSNs.

Ourand’s piece also discusses a potential bankruptcy for the Diamond Sports Group, Sinclair’s subsidiary that operates the RSNs. Spoiler: it wouldn’t be good news for any teams whose games air on a Bally Sports RSN!