Sinclair Broadcasting Group wants to pay pennies on the dollar to regain control of a nationwide chain of regional sports networks — which it had paid $10.6 billion to acquire four years ago only to see it fall into bankruptcy this spring, The Post has learned.
Sinclair, which owns 185 television stations in 86 markets, in partnership with Bally’s has offered roughly $850 million to regain control of its bankrupt subsidiary, Diamond Sports Group, which airs local games on TV under the Bally Sports brand and owns the rights to 39 teams across MLB, the NBA and NHL, sources said.
The deal looks like a last gasp to keep the decades-old regional sports networks broadcasting on local TV. Diamond, which has been mired in bankruptcy court since March and is looking to restructure debts of up to $8.6 billion, has asked the court for another extension, from November 29 to Jan. 29, to present a restructuring plan, the sources said.
But industry experts and the sports leagues say a delay only prolongs the inevitable fate of the troubled RSN model, which suffers from continued cord-cutting and dwindling advertising revenue.
“You need to stop putting a Band-Aid on the regional sports network problem and come up with long-term solutions,” media analyst Rich Greenfield of LightShed Ventures told The Post.
Those solutions involve finding deep-pocketed streamers like Amazon and Apple to buy the rights, or reselling them to the individual teams, sources said.
Last month, MLB argued against the extension, saying Diamond has failed for months to find a profitable operating model, Sportico reported. MLB said that Diamond’s cash on hand declined nearly 90%” between March and August, leaving its final reserves at about $22 million, according to the court record.
“There is no reason to believe that the debtors will finally figure out a path forward,” the league’s lawyers said in court filings
Diamond has been progressing in a deal with the NBA to cut the roughly $600 million it pays in annual rights fees by about 20% for two seasons. But the NBA wants all its media rights back after the 2024-25 season – when its national deals with Turner and ESPN expire, a source close to those talks said.
Commissioner Adam Silver plans to sell all the league’s streaming rights to a tech giant like Amazon starting in the 2025-26 season, a source with knowledge of those talks said.
Warner Brothers Discovery, Diamond’s biggest RSN rival, announced earlier this year it was getting out of the regional sports network business altogether. It sold its rights to the Astros and Rockets back to the teams and shut down other operations.
Locally, the Yankees and Mets control their own broadcasts through YES and SNY, respectively. The Knicks, Rangers and Devils are televised by James Dolan’s MSG Networks.
Adding to Diamond’s financial woes, cable giant Comcast will put its broadcasts on a paid tier this week, which could result in 30% subscription losses, one source said.
As a condition of its deal, Sinclair wants Diamond to drop a $1.5 billion lawsuit against the parent company that alleges it pulled out money from the debt-laden subsidiary for management fees and dividends while knowing it was insolvent.
Sinclair has presented its bargain-basement offer to Diamond’s junior creditors, who hold about $8 billion of that debt and must decide whether to accept what amounts to about four cents on the dollar or the chance to roll their stakes into the new company, sources said.
Presently, the trading value of Diamond’s debt is about two cents on the dollar, the sources added.
Bally’s Sinclair, and the NBA declined comment. Comcast did not return calls.
This story originally appeared on NYPost
