Diamond Sports Group LLC (DSG), parent company of Bally Sports and its sister subsidiaries, filed a motion and proposed order on Wednesday in a federal bankruptcy court in Texas, requesting permission to proceed under a new confidential Term Sheet agreement reached with the NHL, which will keep broadcast rights for 11 of its teams on Bally Sports through the remainder of the 2023-24 season.
A hearing has been set for Jan. 3, but both the NHL and DSG have already agreed to the deal, leaving minimal belief that a judge would not approve it. The NBA worked out a similar deal with DSG in November.
Once the season ends, the regional broadcasting rights for the Nashville Predators, Anaheim Ducks, Carolina Hurricanes, Columbus Blue Jackets, Dallas Stars, Detroit Red Wings, Florida Panthers, Minnesota Wild, Los Angeles Kings, St. Louis Blues, and Tampa Bay Lightning will revert back to the NHL from Bally Sports.
“It’s a resolution that we are comfortable with in light of the totality of circumstances,” NHL deputy commissioner Bill Daly told The Athletic. “It ensures that all our teams will be able to continue to broadcast their games to local fans throughout the balance of the season. That has always been our top priority.”
The most significant part of the motion, which reads: “This transition plan also leaves the door open to potential transactions that could offer a higher recovery or otherwise better path forward for [Diamond Sports] and their estates and paves the way for [Diamond Sports] to propose a chapter 11 plan,” confirms previous reports that DSG wants to add a strategic partner like Amazon, for example, as first reported by the Wall Street Journal on Dec. 18 to step in and purchase these assets and assume any contractual obligation of the RSNs.
The crossover between sports and streaming is nothing new to bigger corporations. Amazon has already moved into the NFL market with “Thursday Night Football” on Prime Video, Apple recently purchased MLS streaming rights for Apple TV+, and Disney and Time Warner share NHL streaming rights between ESPN+ and TNT.
Regional sports networks have been struggling for years, particularly with the explosion of streaming content and the rise of a younger, cord-cutting generation resulting in fewer cable subscriptions.
Traditional cable networks are struggling for the most part, which is why surviving this season and finding a valuable transition for its television rights is highly advantageous to the NHL, its teams, and the players. Article 50 of the NHL’s CBA discusses how to calculate team payroll in accordance with hockey related revenue, which includes television/streaming rights as well as ticket sales, concessions and more.
Article 50.1F details the specifics as it relates to local broadcasting and the impact on HRR as the current issues with DSG presents. While NHL Commissioner Gary Bettman and the league have stated DSG’s proposed deal will not impact the previously projected salary cap for the 2024-25 season of $87.675 million, it most certainly is the beginning of a long process to ensure the continued growth of the NHL with an increasing cap.
While teams are ultimately responsible for the management of the salary cap, the lack of solid increases makes it difficult for players to get the value they believe they are worth, for teams to carry full rosters, and for teams to spend money on adding players and keeping existing ones.
Not to mention, many fans have expressed abundant frustration with regional sports networks because of blackout restrictions.
Follow Clay Brewer on Twitter/X: @ClayBrewer10