As expected, the company that owns the 19 Bally Sports regional sports networks that the affiliated sportsbook cites as an important customer acquisition pipeline is moving forward with bankruptcy.
Diamond Sports Group filed for Chapter 11 protection Tuesday in US Bankruptcy Court. The company will work with debt holders and Sinclair Broadcast Group to eliminate more than $8 billion in debt, according to a statement.
The bankruptcy was anticipated after Diamond did not make a $140 million interest payment in February.
Bally’s touted the RSN deal when announced in November 2020, with Chairman Soo Kim saying the Bally Sports partnerships should “ultimately deliver significant shareholder value.”
No immediate impact for Bally Sports
It is not entirely clear what will happen with Diamond’s broadcast rights to the 42 teams across MLB, NBA and NHL that it currently owns. Diamond must continue to pay the fees associated to those rights or the teams could break their contracts.
The company has $425 million cash on hand and expects business as usual throughout the Chapter 11 process.
“The financial flexibility attained through this restructuring will allow DSG to evolve our business while continuing to provide exceptional live sports productions for our fans,” said Diamond CEO David Preschlack.
What happens to Bally Sports broadcasts?
Diamond plans to run NBA and NHL games through the first round of the playoffs and remains in active negotiations with those teams, according to the New York Post.
MLB, meanwhile, is prepared to broadcast their local games, according to the Post. The league tried to acquire the broadcast rights for the 14 teams but Diamond declined.
Bally Bet changing approach
Bally’s is changing its approach for Bally Bet after a number of acquisitions did not pay off.
“We’re not going to make the same mistakes we made previously, so we’re looking at all adoptions to [grow] in the most profitable way,” new CEO Robeson Reeves said on the company’s fourth-quarter earnings call. “On sports, we recognize that the Bet.Works acquisition did not give us the platform required to develop a competitive product. We didn’t react fast enough there, and this will not happen again.”
The company also shut down Monkey Knife Fight, the daily fantasy sports operator it acquired in 2021.
Fallout from failed purchases
Bally’s is now taking a “deep dive” in its approach to North America to make sure investments have a near-term path to profitability, Reeves said. That includes focusing on states with iGaming.