Diamond Sports Group, a company that owns regional sports network Bally Sports, formally filed for Chapter 11 bankruptcy this afternoon in the Southern District of Texas.
The company announced the news via press release, after Josh Kosman of The New York Post reported yesterday that Diamond is planning to declare bankruptcy. That was expected to happen formally Friday, but apparently the process has been expedited by several days.
“The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the Company for long term success and has determined that the best path forward for the Company and its stakeholders is to restructure through a Chapter 11 process,” said CEO David Preschlack. “We are utilizing this process to reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt.”
The biggest news of all for fans of teams with local broadcast deals being handled via the Powers is the confirmation from the company that the RSN will “continue as normal throughout the Chapter 11 proceedings.” The corporation added it has about $425 million in cash on hand to finance the business through the restructuring. Diamond is in charge of the on-field radio operations of the 14 Major League teams: The Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins are all broadcast by Bally.
Kosman reported yesterday that Diamond will attempt to restructure agreements with a few clubs, but plans to decline entirely the contracts of the Diamondbacks, Padres, Nationals, and Reds. MLB is planning to pick up the tab on teams that have their contracts terminated, the Post reported, and let them go on the free-agent market as the league searches for alternatives.
There is certainly going to be a lot more developments over the coming weeks and months, but the long-awaited failure of a regional sports network entity has officially begun.