from Daniel Kaplan of The Athletic,
Diamond Sports owns 19 regional sports channels airing games of 42 NBA, MLB and NHL teams, feeding those clubs substantial sums that cover a large part of their player payrolls.
Times are generally good for the economics of these sports, but hovering over these teams is the very real possibility Diamond could file for bankruptcy, or perhaps even restructure what it pays the teams, a casualty of the decline in the regional sports channel model and the inflated $9.6 billion price Diamond parent Sinclair paid in 2019 for the network of channels....
“We have seen quite a bit of (subscriber erosion) acceleration over the year,” said Scott Shapiro, Sinclair’s chief financial and operating officer, on the earnings call. “And that’s probably driving, you know, at least 75 percent of the change to (cash flow) guidance, when you look at the magnitude of where churn expectations were at the beginning of the year, to where we’re projecting for the full year.”...
“There is no sale process,” Ripley said, appearing to rebut speculation Diamond is to be sold. “But, you know, we’re talking to parties about deleveraging, strategic partnerships, and things of that nature.” Deleveraging means reducing debt.
Some of those parties are the leagues themselves, which have been reported to want to buy Diamond. Ripely’s comment suggests otherwise, but there is no doubt the NBA, NHL, and MLB have a keen interest in keeping Diamond afloat, and people close to the situation confirmed they are active in the discussions.