Diamond Sports Secures Refinancing Approval, Threatening NHL and NBA Rights

Author:

Jacob Curran

|Published: February 28th, 2024

In a significant development, a US bankruptcy court greenlights Diamond Sports Group's $495m settlement from Sinclair and a $450m debtor-in-possession financing package, potentially jeopardizing the National Hockey League (NHL) and National Basketball Association (NBA) plans to reclaim their rights at the end of the current seasons.

While the approval enhances Diamond's chances of retaining rights for major leagues (NHL, NBA, MLB), concerns arise as the restructuring support agreement indicates that the NBA and NHL team rights agreements may not be subject to early termination, putting local market rights at risk.

Judge Christopher Lopez, overseeing the Chapter 11 proceedings, deems it "a really good day for Diamond Sports," despite uncertainties surrounding the $8.6bn debt that led to the bankruptcy.

Diamond's restructuring agreement includes a crucial deal with Amazon, providing $115m as convertible debt with an option for an additional $50m.

Amazon gains streaming rights to Diamond's properties, encompassing 11 NHL and 15 NBA teams, but only five of the 11 MLB clubs, with streaming rights renewed annually.

The potential voiding of NBA and NHL agreements could steer teams on Bally Sports regional sports networks towards Amazon Prime Video for local market streaming rights.

While the court and Judge Lopez must still approve Diamond's official company reorganization plan, the refinancing approval sets a positive tone for Diamond's future.