Giant that owns rights to broadcast 14 MLB teams is about to file for bankruptcy

The Diamond Sports Group, which owns broadcasting rights for 14 out of 30 major league teams, is imminently filing for bankruptcy.토토사이트

Diamond Sports Group announced in a press release on the 15th that it had a 30-day grace period “to maximize financial flexibility”.

Those who were due to pay about $140 million in interest by February 15 took this action as they were unable to pay it.

They said they would discuss alternative strategies with creditors and other shareholders to decide on their future course of action. Local media such as ‘Forbes’ predicted that the company would eventually file for bankruptcy.

Diamond Sports Group operates ‘Valley Sports’, the largest regional sports network in the United States. It operates a total of 19 regional networks and is in charge of hosting broadcasters for 14 MLB, 16 NBA, and 12 NHL teams.

Originally, these companies were part of FOX Sports. But in 2019, Sinclair, which owns Diamond Sports Group, bought the company for $10.6 billion as Walt Disney, which owns ESPN, acquired FOX and the government ordered a sale of the local sports network. The interest not paid this time is interest on $8.6 billion that Sinclair borrowed in the course of the acquisition.

There are concerns that this situation will also affect the profit structure of each professional sports club. According to Forbes, citing ‘S&P Global Ratings,’ the group has to pay a total of $1.8 billion for broadcasting rights this season.

The Diamond Sports Group said that during this period, production of broadcast programs would “go ahead as usual,” but depending on the situation, a blow seems inevitable. In this regard, Major League Commissioner Rob Manfred said that the secretariat plans to be directly involved in the event of a setback in the relay production of the broadcasters they run.

For nearly 50 years, American professional sports have been relying on broadcast rights contracts between local sports cable companies and clubs as their main source of revenue. However, as the number of cable TV viewers declines day by day, this model appears to be faltering. Over the past 10 years, the number of households watching cable TV in the United States has decreased significantly from 103 million to 66 million.

Valley Sports responded to this trend by launching an online streaming service belatedly in September of last year, but it is said that it did not raise profits as much as expected.

‘Forbes’ predicted that the current profit model of Prosports could be overturned by this incident, and that online streaming would become a new alternative to the local sports broadcasting market.