Last month, Bally Sports Parent Company asked the judge overseeing its bankruptcy for permission not to delay a go-forward plan on how Bally Sports will get out of bankruptcy. The judge has yet to rule on that, but now DIRECTV has told the Judge it will be ok with Bally Sports delaying its go-forward plan, but it has concerns over its handling of this and the MLB.
In the filing, Bally Sports said that Bally Sports:
They devoted most of their resources during the first few months of the cases to waging a costly battle with Major League Baseball (“MLB”) and its teams only to lose in Court and alienate MLB, one of their most important business partners, dimming their prospects for a successful reorganization. The Debtors recently decided to pursue a similar tactic against DIRECTV, one of their largest and most important partners, by using the automatic stay as a sword to demand payments from DIRECTV for rights they are no longer providing to DIRECTV, while DIRECTV is compelled as a result of the Debtors’ own choices to pay MLB for the very same content that MLB no longer provides to the Debtors. These actions, which are just two examples, have done little to provide certainty to the teams, leagues, distributors and customers that depend on the Debtors to provide sports fans across the country have access to regional sports content.
This all comes as, 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, including one channel, Bally Sports Arizona, that just recently shut down.
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.
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 also shut down 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.
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. So far some of its partners are asking the Judge to reject a delay and others like DIRECTV are ok with the idea.