**Racing Against Time: Diamond Sports Group Works to Formulate Chapter 11 Exit Plan**
**Introduction to Diamond Sports Group’s Bankruptcy Situation**
Diamond Sports Group, the bankrupt owner of local sports channels, is facing the urgency of formulating a Chapter 11 exit plan before the start of professional basketball and hockey games. The company aims to reassure the leagues, teams, and fans that it is ready to broadcast the upcoming games. To achieve this, Diamond must reach a resolution on its path through bankruptcy quickly. Brian Hermann, a lawyer representing Diamond, emphasized the management team and board’s awareness of the limited time available to take action.
**Broadcasting the NBA and NHL Games**
Diamond intends to broadcast the National Basketball Association (NBA) and National Hockey League (NHL) games that are scheduled to take place. However, it needs to resolve its bankruptcy situation promptly to demonstrate to the leagues its preparedness. Hermann raised this point during a court hearing, acknowledging the pressing nature of the issue. The company’s exclusive right to submit a bankruptcy exit plan has been extended until September 30 following a deal with senior lenders and creditors.
**Concerns from the NHL**
Shana Elberg, a lawyer representing the NHL, revealed that the league has been engaged in constructive discussions with Diamond regarding their future business relationship. However, she also expressed the risk of an agreement not materializing. Elberg stressed the importance of the NHL having certainty with Diamond before the start of the 2023-2024 season. As the NHL pre-season begins on September 23 and the regular season on October 10, time is of the essence.
**Awaiting a Statement from the NBA**
While a representative for the NBA did not speak during the court hearing, it is crucial for the league to have clarity on Diamond’s situation before the start of the regular season on October 24.
**Competition from Tech Giants**
Walt Disney Co., Apple Inc., Amazon.com Inc., and YouTube have already expressed interest in streaming NBA games and potentially taking over the local rights currently held by Diamond. This further emphasizes the need for Diamond to resolve its bankruptcy quickly to remain competitive. The company filed for Chapter 11 in March with the goal of reducing $8 billion in debt. However, it finds itself in a challenging position due to the rapidly changing sports broadcasting industry.
**Potential Separation from Sinclair Broadcast Group Inc.**
Advisers are exploring potential structures that would separate Diamond from its parent company, Sinclair Broadcast Group Inc., allowing Diamond to operate independently once it exits bankruptcy. Brian Hermann mentioned that it is likely Sinclair’s equity in Diamond will be eliminated, as is often the case in Chapter 11 bankruptcy filings. Diamond recently filed a lawsuit against Sinclair, alleging the wrongful diversion of assets from the troubled sports broadcaster. Sinclair, on the other hand, has disputed the claims made in the lawsuit.
In conclusion, Diamond Sports Group is on a time-sensitive mission to formulate a Chapter 11 exit plan. The company must address its bankruptcy situation promptly to assure the NBA, NHL, teams, and fans of its readiness to broadcast upcoming games. With competitors showing interest in streaming NBA games, Diamond faces significant challenges in an evolving industry. However, by resolving its bankruptcy quickly and potentially separating from its parent company, Diamond aims to position itself for success in the future.