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Diamond inches closer to bankruptcy exit

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Apr 18, 2024
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The endgame for Diamond Sports Group's bankruptcy saga is in sight, though the beleaguered regional sports network group still has a few more hurdles to clear.

Why it matters: How Diamond emerges from bankruptcy and operates going forward will serve as a bellwether for the health of the televised local sports industry.

State of play: Diamond took more steps Wednesday in its quest to exit Chapter 11.

  • Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston approved Diamond's 174-page disclosure statement, which outlines Diamond's intended operation in the future.
  • A confirmation hearing, the final step before Diamond can emerge from bankruptcy, has been set for June 18.

The big picture: Diamond still has multiple deals it needs to reach, both with distributors and its league partners, before that confirmation hearing.

  • The RSN group is in discussions on long-term carriage deals with DirecTV and Comcast, though it is not clear how close they are to any agreements. Diamond last month landed a new long-term carriage deal with Charter.
  • Collectively, the three deals account for 81% of Diamond's affiliate revenue, per its disclosure statement.
  • Additionally, Diamond still needs to reach new agreements with its NBA, NHL and MLB teams.
  • Brian Hermann, a lawyer for Diamond, said that the company has deal proposals in front of the NBA and NHL but offered no update on its talks with the MLB, which has been far more pessimistic about Diamond's future.
  • Regarding talks with Comcast and DirecTV, Hermann said, "We remain optimistic and confident that we will be able to reach agreements with both of them."

Catch up quick: In January, Diamond reached a restructuring support agreement with its creditors that included a $115 million investment from Amazon, plus an additional $450 million in financing from certain debt holders.

  • That agreement gave Diamond a chance at continuing. Before Amazon came in the picture, the company likely would have been liquidated.
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