Last week, Bally Sports Parent Company asked the judge overseeing its bankruptcy for permission not to pay the Arizona Coyotes contract. This will allow Bally Sports to end its TV contract with the company. This comes as Diamond Sports Group, the parent company of Bally Sports, says it would like to shut down the Bally Sports Arizona RSN after it lost rights to most of the sports teams on that channel.
Now, DIRECTV is trying to get out of paying for several Bally Sports channels that no longer include live sports, including Bally Sports Arizona. In response to this, Bally Sports is asking its Bankruptcy Judge to force DIRECTV to pay the full price even though it no longer includes the live sporting events it offered when the contract was signed.
At issue here is the question of how much DIRECTV is obligated to pay for sports that are no longer offered by Bally Sports. Bally Sports wants that money to help it stay open at the same time, Bally Sports no longer offers these sporting events.
Here is what Bally Sports said in its filing to the judge:
The Debtors seek entry of an order substantially in the form attached hereto (the “Proposed Order”) (i) authorizing the Debtors to redact and file under seal certain portions of the (a) Debtors’ Motion (I) to Enforce the Automatic Stay Against DIRECTV, LLC; (II) to Compel Performance of DIRECTV, LLC’s Obligations Under an Executory Contract.
This comes as Bally Sports has already lost TV rights to the first major NBA team, the Suns, which cut ties with Bally Sports and is now going to make their games free over the air thanks to a partnership with Gray Television. Not only will the games be free over the air, but they will also be streamed to viewers in the market on the new Suns Live streaming service. With this deal starting this month, fans of the Phoenix Suns and the WNBA Phoenix Mercury will be able to watch the games for free over the air on KTVK and KPHE. With the expansion of KPHE, the Suns will now be free to watch over the air in all three of Arizona’s TV markets.
Bally Sports also dropped the Arizona Diamondback TV contract over the summer. This leaves Bally Sports Arizona with just the Coyotes as the only professional sports TV it has TV rights for at this time. Without the Suns, Mercury, and Diamondbacks, Bally Sports may see its Bally Sports Arizona channel as an unprofitable TV stations. Dropping the Coyotes TV contract may be more profitable than trying to keep the channel running.
Because of all of this, Diamond Sports Group told the Judge after seeing its court case that this is “the final step in exiting the Bally Sports Arizona RSN, the Debtors have concluded that the Coyotes Agreement is not necessary to the Debtors” business and is unlikely to provide a net benefit to the Debtors or their estates.”
Now, Bally Sports needs to wait for the Judge to approve the request, but very soon, Bally Sports Arizona could shut down for good. This raises the question of what the Judge will do with DRECTV’s refusal to pay for the channel as he considers letting Bally Sports shut down that network.