Diamond Sports Group LLC's path to emerge from Chapter 11 bankruptcy protection just got a little clearer in the wake of a new carriage agreement with Comcast Corp.
The cable giant and regional sports network operator reached a pact for more than a dozen of Diamond's Bally Sports-monikered RSNs to become available on Comcast's Xfinity Ultimate TV package on Aug. 1. The Diamond-owned RSNs have been dark to Comcast video customers since May 1, after the parties failed to reach a carriage renewal. Since then, Xfinity customers have been without access to a dozen MLB teams' local games, among other content.
Under the new agreement, Xfinity Ultimate TV customers also will be able to stream Diamond's RSN content through the Bally Sports app.
Financials terms and length of the deal were not disclosed.
The Diamond RSN migration from its previous position on basic cable follows Comcast's game plan of placing such channels on the more expensive Ultimate TV package as it looks to provide flexibility for customers who rarely or never view sports. Several other RSNs have moved to Comcast's Ultimate TV offering, including ROOT SPORTS Northwest (US), Mid-Atlantic Sports Network (US) and SportsNet Pittsburgh (US), as well as MLB's linear carriage for the Arizona Diamondbacks and Colorado Rockies.
Xfinity customers who upgrade to the Ultimate TV package by Aug. 30 can receive it free for a three-month trial period, after which it will cost an additional $20 per month.
Carriage disputes and higher tiering have contributed to a shrinking subscriber base for RSNs more broadly. The combined year-end 2023 subscriber count for all RSNs in S&P Global Market Intelligence Kagan's database was 108.0 million, down 11.7% year over year. Steeper declines are projected for 2024 and 2025, according to Kagan estimates.
The Comcast reconciliation is welcome news for Diamond. The Sinclair Inc. unit filed for Chapter 11 bankruptcy protection in March 2023 amid declining linear landscape and more than $8.5 billion in debt. The case is being administered in the US Bankruptcy Court for the Southern District of Texas, Houston Division.
A confirmation hearing for Diamond to emerge from bankruptcy had been scheduled for July 29 and 30. However, that date, as well as a deadline to vote on or opt out of Diamond's restructuring plan, were delayed on July 24, when Diamond attorneys indicated the company was making progress with Comcast, as well as nearing new deals with the NBA and NHL. All of the restructuring-related dates were indeterminate as of press time.
The NBA, NHL and MLB had all expressed concerns about Diamond's ability to function as an ongoing concern without Comcast carriage. Diamond earlier told the court that Charter Communications Inc., DIRECTV Holdings LLC and Comcast, the nation's three largest linear distributors, account for 81% of its affiliate fees, its primary revenue source. Diamond now has deals with 11 of its 12 largest distributors, including Charter, DIRECTV, Cox Communications Inc. and virtual provider fuboTV Inc. Ten Diamond RSN have been disconnected from Altice USA Inc.'s Optimum TV systems since July 1.
With the Comcast deal in place, Diamond is focusing on coming to new deal terms with the NBA and NHL. Diamond held local TV and streaming rights to 15 NBA and 11 NHL clubs, but those pacts ended with the 2023-24 regular season and first-round playoff action.
Since then, two NHL teams have exited the Diamond sphere. The defending champion Florida Panthers iced its relationship with Bally Sports Florida (US) in favor of a multiyear deal with The E.W. Scripps Co. under which three of the company's stations in South Florida will air the team's games, starting with the 2024-25 campaign. A Panthers' direct-to-consumer platform will also be in play.
The Dallas Stars, whose local games had been airing on Bally Sports Southwest (US) netted a seven-year agreement with A Parent Media Co. Inc. to stream all its local games free of charge, beginning with the upcoming campaign. The advertising-driven platform will operate under the Victory+ banner. The Stars are also reportedly looking to sign on a local station deal.
At this juncture, Diamond has rights deals with a dozen MLB teams, though its pacts with the Texas Rangers, Cleveland Guardians and Minnesota Twins expire at the end of the 2024 regular season.
Diamond also holds local direct-to-consumer rights to five MLB teams: the Detroit Tigers, Miami Marlins, Milwaukee Brewers, Kanas City Royals and Tampa Bay Rays. As part of its restructuring plan, Diamond has reached a deal for Amazon.com Inc. to take a minority equity position in the company and for Prime Video to assume its direct-to-consumer operations.
"Entering a new carriage agreement with Comcast, our third largest distributor, is a critical step forward in our restructuring effort ... With certainty on our distribution, we are focused on finalizing an agreement with the NHL and resolving our ongoing negotiations with the NBA," said Diamond Sports CEO David Preschlack in a statement. "We are mindful that time is of the essence with basketball and hockey seasons fast approaching, and once agreements with our team and league partners are complete, we intend to move expeditiously to present a plan of reorganization to the Court.”
The 2024-25 NHL and NBA seasons are scheduled to begin on Oct. 4 and 22, respectively.