Diamond Sports files for bankruptcy ahead of MLB season

The largest owner of regional sports chains filed for Chapter 11 bankruptcy protection after the company failed to pay $140 million on its debt load of more than $8 billion.

Diamond Sports, an independent arm of the Sinclair Broadcast Group that holds broadcast rights for 42 professional teams, said Tuesday it is finalizing a restructuring support agreement with most debt holders and Sinclair to pay off its debt burden, CNBC reported.

The Post reported exclusively on Monday that Diamond is expected to use bankruptcy proceedings to terminate the contracts of at least four MLB teams as the company pays them more legal fees than it earns back through cable contracts and advertising.

However, Diamond said it would not suspend local broadcast services for the 19 Bally Sports-branded networks across the country, which include coverage of professional hockey, basketball and baseball games.

“DSG will continue to broadcast games and connect fans across the country to the sports and teams they love,” said Diamond Sports CEO David Preshlak. “We look forward to working constructively with our team and league partners, as well as all DSG stakeholders, throughout this process and beyond.”

Major League Baseball, whose season begins March 30, said Diamond’s bankruptcy filing is an unfortunate but expected development.

“Despite Diamond’s economic situation, there is every reason to expect that they will continue to broadcast all the games they participated in during the bankruptcy process,” an MLB spokesman said.

Diamond’s roughly $8.67 billion debt stems from Sinclair Broadcast Group paying $10.6 billion to buy the company from Disney in a highly leveraged buyout in 2019.

Under the restructuring support agreement, Diamond’s principal creditors will be unaffected, while secured and unsecured creditors will exchange their debts for shares and warrants issued by the reorganized company.

Diamond has been hampered by the accelerating rate of cable outages in recent years, hurting regional sports networks.

According to The Wall Street Journal, Warner Bros. Discovery intends to exit the regional sports networks business.

With mail wires