MLB has ‘grave concerns’ for Diamond reorg plan

Major League Baseball and the Atlanta Braves formally objected to Diamond Sports Group’s reorganization plan Friday, citing, among other things, a lack of information to corroborate the viability of the company’s projections.

In a motion filed in Houston bankruptcy court, MLB and the Braves said they have “grave concerns that, if the plan is confirmed, there is a substantial likelihood that the debtors will find themselves once again in financial distress and/or bankruptcy court in the near future.”

Diamond, approaching 20 months in Chapter 11 bankruptcy, is scheduled to begin its confirmation hearing Thursday, during which a federal judge will determine whether to approve the operator’s go-forward plan.

Diamond held regional sports network contracts with 12 MLB teams during the 2024 season but decided last month to keep only the Braves deal under its current iteration while hoping to negotiate new terms with some of the other clubs.

Four teams — the Milwaukee Brewers, Cleveland Guardians, Minnesota Twins and Texas Rangers, all on expiring contracts — have since broken away from Diamond. The company announced a near linear and digital rights agreement with the St. Louis Cardinals on Thursday and is expected to soon announce one with the Miami Marlins. The Tampa Bay Rays, Detroit Tigers, Los Angeles Angels, Kansas City Royals and Cincinnati Reds remain in limbo.

Diamond, which recently rebranded from Bally Sports to FanDuel Sports, is also looking to finalize a commercial arrangement with Amazon that would allow it access to the direct-to-consumer Prime Video platform.

MLB and the Braves cited a lack of clarity on that deal among its concerns, writing that Diamond’s “refusal to produce information concerning the proposed commercial lynchpin of the go-forward business plan as to [direct-to-consumer] subscribers, a subscriber base that the debtors estimate in the financial projections to grow by hundreds of percentage points between now and the end of 2027, by itself justifies a finding that the debtors cannot meet their feasibility burden.”

MLB and the Braves added that Diamond has “consistently failed to produce” information about its new distribution agreements to allow for cross-examination in the linear-cable space and that they should not be “compelled to partner with a business that does not have a realistic roadmap to future operations.”

Diamond currently has linear and digital rights deals with 13 NBA and eight NHL teams.

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