August 21, 2023: On Thursday, a Bankruptcy judge supported Diamond’s request to obtain in mediators as it is dealing with creditors to reach a reorganization project. The company said in court papers that it needs to meet “substantial plan progress” ahead of the forthcoming NBA and NHL seasons in October.
“I think sports are part of the fabric of America, and many fans out there from day one want to know how and when their teams are going to play,” said Judge Christopher Lopez during Thursday’s hearing, adding all parties should participate in the discussions to resolve.
Two judges from the U.S. Bankruptcy Court in the Southern District of Texas, Judges David Jones and Marvin Isgur, will preside as mediators.
Last week, Diamond won court approval to extend its period to develop a reorganization plan.
Diamond sought bankruptcy protection earlier this year, burdened by more than $8 billion in debt and the significant headwinds hitting the regional sports networks business as more consumers cancel their cable subscriptions in favor of streaming.
At earlier points in the case, the company and some of its creditors, including during a hearing last week, “have indicated that mediation could help [Diamond] sort through myriad issues they must confront on the path toward reorganization.”
Diamond has until September 30 to file a reorganization plan, weeks before the opening of the 2023-24 NBA and NHL seasons. Diamond needs to continue carrying local games on its networks. Since its filing, it has already seen some teams leave its Bally Sports channels due to a breakdown in rights fees discussions.
The prospect of regional game rights being up for grabs has attracted broadcast station owners, including Nexstar Media Group, Gray Television, and E.W. Scripps Co. looking to carry the games. The Phoenix Suns recently exited a Bally Sports network for such a deal.
Besides shedding its hefty debt load, Diamond wants to reset some of its rights deals with teams to reflect market rates.
Last week, a lawyer on behalf of the NHL stated that the league was in constructive discussions with Diamond but that “time is of the essence” ahead of the upcoming season.