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Broadcasting & Cable
Broadcasting & Cable
Business
Daniel Frankel

MLB: Bankruptcy Court Needs to Finally Stop Diamond From Continuing to 'Stumble Through the Restructuring Process' After Its 'Failure' to Secure Comcast Distribution Deal

Bally Sports.

The up and down 14-month bankruptcy restructuring of regional sports network operator Diamond Sports Group has hit yet another major pothole. 

Two weeks after it embarked on a surprising carriage dispute with Comcast, the Sinclair Broadcast Group subsidiary that manages 18 Bally Sports-branded local cable channels was hit hard by its longtime content partner and foe, Major League Baseball. 

Also Read: Everything You Need To Know About the Bally Sports Bankruptcy

On Tuesday, the league motioned the Houston bankruptcy court overseeing Diamond's restructuring that Diamond likely "will not emerge from these Chapter 11 cases as a going concern."

Before Comcast announced the surprise blackout of Bally Channels on April 30, Diamond had secured earlier within the month distribution renewals with Charter Communications, DirecTV and Cox Communications. It was expected that Diamond could finally emerge from bankruptcy on June 18, when a hearing is scheduled for the court to hear its restructuring plan. 

With it now lacking revenue from the No. 2 U.S. pay TV operator, MLB lawyers said Diamond's whole restructuring plan -- which they labeled as "highly conditional" on things like carriage renewal agreements working out -- is a strikeout. 

"Unless Comcast and the Debtors can come to a new agreement, it is highly likely that the loss of carriage of the Debtors’ broadcasts by Comcast, and the resulting loss of licensing fees from Comcast, will render the Plan unconfirmable, thereby wasting time and estate resources to the detriment of MLB, the Signatory Clubs and other interested parties," MLB lawyers said in their statement. 

The motion identified 12 MLB clubs as being impacted by the Comcast blackout, which reportedly stemmed from Diamond's unwillingness to have its Bally Sports channels kicked to the cable operator's pricier digital tiers. 

MLB said it's concerned that it could wind up having to scramble for alternative local TV distribution arrangements for these teams, as it did last summer when Diamond abruptly abandoned deals with the San Diego Padres and Arizona Diamondbacks. 

This, of course, isn't the first time Major League Baseball has expressed its doubt and skepticism regarding Diamond's restructuring. And it might not be the last. 

Diamond and Comcast haven't updated the status of their impasse since April 30.

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