Diamond Sports Group, operator of the Bally's branded TV sports networks, will miss $140m in interest payments due today (15 February), in a move that puts it near bankruptcy.
The company has instead chosen to enter a 30-day grace period on the interest payments. The interest payments relate to the company’s 6.625% senior unsecured notes due in 2027, the 5.375% 2L senior unsecured notes due 2026 and the 5.375% 3L senior secured notes due 2026.
Talks with creditors to continue
During this grace period, it said, talks with creditors and other key stakeholders will continue, “regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future”.
This may result in the Sinclair Broadcast Group subsidiary filing for Chapter 11 bankruptcy, with its total debts reportedly $8.6bn.
Diamond Sports said it expects that “business will continue as usual” during this grace period. The company operates 19 regional sports networks (RSNs) across the US, which carry the Bally’s brand.
Sinclair Broadcast acquires Fox Sports RSNs
This was agreed in November 2020, as part of a major integration deal between Sinclair Broadcast and the operator formerly known as Twin River. Sinclair had acquired the RSNs from the Walt Disney Company, which was required to divest the assets as part of its acquisition of 21st Century Fox.
These networks hold the rights to show games for 42 professional sports teams, which may now lose out on rights payments.
However, Bally’s Corporation chief financial officer Bobby Lavan noted the operator was likely to be unaffected by a potential bankruptcy, noting that it had no liability related to Diamond Sports’ debt, and that the broadcaster held no equity or ownership rights to Bally’s.
“We continue to monitor the Diamond situation closely and look forward to working with the new management team,” Lavan said in the wake of the operator’s preliminary full-year results for 2022, published earlier this week.
“Bally’s will continue to promote its brand through multiple means, including our national portfolio of Bally’s branded casinos, various media partnerships like that with Sinclair and the Tennis Channel and our global digital portfolio.”