NBA and NHL Express Concerns About Reorganization

The National Basketball Association and National Hockey League have expressed concerns about the future of Diamond Sports. They question whether the regional sports network owner can develop a feasible business plan in time for the upcoming fall seasons.

The owner of the largest collection of regional sports networks, Diamond Sports—operating under the Bally Sports brand—has been in bankruptcy protection since March of the previous year. The leagues are apprehensive that a workable business plan may not be in place before the start of the 2024-25 season.

During a status conference in bankruptcy court on Tuesday, lawyers representing each league voiced their concerns. This came after Diamond announced a delay in its hearing to confirm its reorganization plan from mid-June to late July.

Vincent Indelicato, NBA attorney, stressed on Tuesday how crucial timing is for the NBA, with the 2024-2025 season rapidly approaching. He emphasized that a lot needs to be accomplished well before the season starts to properly produce and distribute games.

Similarly, the NHL attorney expressed concerns that if Diamond Sports fails to come up with a workable business plan in the near future, the leagues could be left scrambling to find ways to produce and broadcast games in local markets. Some Major League Baseball teams have already moved forward without their Bally Sports network.

Many NBA and NHL teams have already secured deals with local broadcast station groups to carry local games.

Diamond Sports needs to formulate a reorganization plan detailing its future outside of bankruptcy protection and gain court approval to proceed. This approval allows a company to exit bankruptcy protection.

Indelicato stated on Tuesday that the NBA is urging Diamond Sports to have a fully fleshed out business plan by no later than July.

For Diamond, the journey to devising a reorganization plan has been long and filled with negotiations—with lenders to restructure its significant debt, with leagues and teams for streaming TV rights, and with pay-TV distributors that air the games.

The recent collapse of talks between Diamond Sports and Comcast Corp. has disrupted the sports network operator’s progress, as stated by its lawyers on Tuesday.

Last month saw Comcast customers losing access to Bally Sports networks, affecting fans of 11 MLB teams. Despite this, NBA and NHL fans have not yet faced any issues due to the leagues being in the postseason. Regional sports networks broadcast regular season local games.

The attorney representing Diamond Sports stated on Tuesday that the company is continuing negotiations with various stakeholders. However, it hit a roadblock with Comcast, leaving it with no option but to consider alternatives.

Pay-TV customer loss has been accelerating in recent years as people switch to streaming alternatives, and this has significantly affected regional sports networks. In addition, Diamond Sports had accumulated more than $8 billion in debt from Sinclair‘s 2019 acquisition of the networks.

Disclosure: NBCUniversal and CNBC are owned by Comcast.