Diamond Sports Group on the brink of bankruptcy
The GIST: Diamond Sports Group is channeling Michael Scott. On Wednesday, the regional sports broadcaster skipped $140 million in interest payments to its bondholders, a sign that Diamond is prepping to file for bankruptcy.
The details: The company now enters a 30-day grace period as it continues discussions with management, creditors and stakeholders. Those talks have unsurprisingly focused on bankruptcy, but the situation is reportedly “fluid.”
- Diamond wants to keep its networks running, indicating that it will pay for its current broadcast slate, including local rights to the WNBA’s Phoenix Mercury. Teams aren’t rushing to call it quits, either — hockey and basketball franchises, like the NBA’s Indiana Pacers and the W’s Fever, recently inked new agreements.
The impact: This may be “the end of the regional sports network (RSN) biz as we know it.” Some fear that Diamond’s missed payments foreshadow hardship for RSNs as Americans continue to cut cords — roughly 66% of U.S. households pay for cable these days, down from 79% in 2017.
Zooming out: Niche programming is selling on multiple content verticals, yet traditional media companies like RSNs aren’t feeling the love despite having loyal audiences. The format may be the culprit — unique programs are a hit on digital platforms, where personalization is key. Maybe all your problems don’t go away when you declare bankruptcy.