After weeks of reports that Sinclair’s Sports Channels are preparing for bankruptcy, including Bally Sports RSNs, it has finally happened. Earlier today it was reported that Bally Sports and all of the Sinclair Sports Channels have declared bankruptcy.
The company called Diamond Sports Group LLC, which runs Sinclair’s sports channels, is reportedly $8.6 billion in debt. Sinclair is hoping to strike a deal to help them keep the channels operating thanks to Chapter 11 Bankruptcy.
With this being Chapter 11, Bankruptcy Bally Sports will keep operating. Sinclair hopes to use this bankruptcy to break free from high debts and payments.
In total, Sinclair owes $55 billion in sports-media rights, according to Bloomberg. A bankruptcy could put payments to the NBA and NHL at risk. It is being reported that Sinclair will skip a $140 million interest payment due in mid-February, starting a 30-day grace period for the company.
Since Sinclair bought Fox Sports RSNs, payouts from cable networks are reportedly drying up as companies are refusing to pay the high price Sinclair wants for its Bally Sports RSNs.
Sinclair will likely seek to end some contracts with teams and cut back on payments to others. MLB has already announced that if Sinclair is unable to air MLB games because of bankruptcy, they will take back the rights and stream the games online.
MLB, NHL, and NBA have all said they have plans to stream games if Bally Sports is unable to. MLB is reportedly planning to stream games for free in markets where RSNs fail. For now, though, we will have to wait and see what happens with bankruptcy. Sinclair seems to hope that Bally Sports will be able to renegotiate its debt and keep most, if not all, of its sports rights.
It is reported that Sinclairs Diamond sports group has about $585 million cash in hand but owes about $2 billion in fees to teams this year.