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- Will the never-ending Diamond Sports bankruptcy drama finally culminate this week?
Will the never-ending Diamond Sports bankruptcy drama finally culminate this week?
Also, will David Zaslav and other media titans really enjoy the smooth, friendly M&A climate they're all expecting under a second Trump regime?
Daniel Frankel
November 11, 2024
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Welcome to the fifth weekly edition of Next TMT, a newsletter focused on the intersection of technology, media and telecom. This week’s issue is still free — like us, at least until a Republic of Gilead black van shows up and whisks us away to the carcinogenic air of The Colonies. Happily, this issue focuses on some top-level media executives, who are far more optimistic about the next 1,400 days than we are. So this will be a joyful read, promise. Oh, and while you’re scrolling, please give a click to this week’s sponsor, AI Tool Report. That click — and signup, if you’re so inclined — supports our independent journalism. Thank you!
Table of Contents
Diamond Sports Group bankruptcy Day 607: With key hearing set for Nov. 14, Angels and Cardinals are in, Reds are out … and Braves object
The never-ending Chapter 11 restructuring of Diamond Sports Group heads to a two-day confirmation hearing on Nov. 14. Finally, the bankruptcy restructuring plan for the regional sports network operator will get its days in court, unless it gets postponed again.
Diamond, a Sinclair Broadcast Group subsidiary, entered bankruptcy way back on March 14, 2023, and operates the erstwhile Bally Sports local cable channels. In early October, Diamond used bankruptcy protection to terminate its local TV contracts with 11 of its 12 remaining Major League Baseball team partners. But last week, it came to revised terms with the Los Angeles Angels and St. Louis Cardinals.
The two clubs, which agreed to renegotiate the fees they charge Diamond for local TV rights, will rejoin baseball’s Atlanta Braves as part of Diamond’s rebranded “Fanduel Sports Network.” (Diamond ditched the “Bally Sports” name in October.)
It’s unclear if more MLB teams will come to terms and rejoin the Diamond RSN fold. The Milwaukee Brewers, Cleveland Guardians and Minnesota Twins have already joined an alternative DTC local video platform being set up by MLB. The Texas Rangers said they’re also exploring alternatives to Diamond. And last week, the Cincinnati Reds filed a motion to exit their joint venture arrangement for Diamond Sports Net Ohio, with plans to also join MLB’s DTC gambit. (The FanDuel-branded Ohio channel will still be the RSN home of the NBA’s Cleveland Cavaliers and NHL’s Columbus Blue Jackets.)
The MLB’s Tampa Bay Rays, Detroit Tigers and Kansas City Royals remain in limbo for now.
Are all the rest of Diamond’s remaining NBA, NHL and MLB constituents, not to mention its creditors, ready to sign off on a restructuring plan? Well, no.
The Braves, along with MLB, filed an objection late last week to Diamond’s heavily redacted restructuring plan, indicating “grave concerns” that the “debtors will once again find themselves in financial distress.” As it has in the past, Diamond has blacked out lengthy sections of its voluminous plan detailing its contracts with pay TV operators including Charter, Comcast and DirecTV.
Diamond insists these key details are proprietary trade secrets. MLB and the Braves argue that there’s no way to tell if Diamond is a viable local TV partner without seeing that data.
Despite MLB and Diamond’s disagreements, Judge Chris Lopez hasn’t yet delayed Thursday’s confirmation hearing, as he has several times in the past. The case has been closely tracked, carrying implications ranging from the fate of the flailing pay TV ecosystem to whether spiraling sports largesse can continue to escalate.
Will we finally have a determination on Diamond’s fate this week?
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Next Text: Zaslav and other media titans welcome the blue skies of a second Trump regulatory regime, but are they going to get the business climate they’re expecting
Our weekend SMS exchange between veteran reporters David Bloom and Daniel Frankel on all things technology, media and telecom also looks at the dwindling impact of cable news and the emerging political heft of YouTube
DANIEL FRANKEL: It was an inspirational week, with a profoundly flawed Republican presidential candidate, who already floundered at the job once and had since betrayed countless additional failings of judgement, morality and health over the past four post-presidency years, getting his old job back, with a mandate of a solid majority to boot. Sure, the American people have clearly spoken in majority. No doubt. But to paraphrase Chris Rock, we could all be mayor.
In our not-so-manufacturing-based neck of the business media woods, where the specter of Trump tariffs doesn’t loom as terrifyingly large, media titans gleefully focused on what is expected to be a deal-friendly M&A climate, sans folks like Lina Kahn saying no. I know you wrote about this very topic last week. But I’ll keep it going here … Over at Sinclair, which helped foment Tuesday’s landslide with the propagandizing power of its local news broadcasts, CEO Chris Ripley rhapsodized about the blue skies ahead. “We’re very excited about the upcoming regulatory environment,” he told equity analysts. “It does feel like a cloud over the industry is lifting here.” A day later, during Warner Bros. Discovery’s Q3 call, CEO David Zaslav remarked that Trump-led deregulation will “provide real positive and accelerated impact on this industry that's needed.” (Certainly, by dismantling Jeff Zucker’s left-leaning vision for CNN, and rendering the cable news network an also-ran trailing both Fox News and MSNBC, Zaslav contributed in his own way to Tuesday night’s outcome.)
WBD CEO David Zaslav told equity analysts that a second Trump Administration, and its promise of regulatory reform, will deliver a “real positive and accelerated impact on this industry that's needed.”
But is this illiberal wave, inevitable as it might be, really good for business? I’m not sure it all works that way. I vividly recall an early 2017 AT&T earnings call, when then-CEO Randall Stephenson told investors over and over what a “businessman” the president elect was, despite his six bankruptcies. And despite Stephenson’s odious genuflecting, he soon found himself suing the U.S. Justice Department to save AT&T’s $85.4 billion Time Warner Inc. purchase … which had been held up because Trump wanted to muzzle the Zucker-controlled CNN. Nobody seems to remember anything about the score-settling chaos of President Trump 1.0.
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