Diamond Sports Group wants to reduce rights fees to NBA, NHL teams
The biggest regional sports network owner in the country is minding its wallet even more as the NBA and NHL get ready for their new seasons.
Josh Kosman of the New York Post reported that in its latest offer during bankruptcy proceedings, Diamond Sports Group is trying to cut rights fees owed to NBA and NHL teams in advance of their 2023-24 seasons. The joint venture of Sinclair Broadcasting and Entertainment Studios aims to reduce its fees to teams of those leagues by 20% before the Sept. 30 deadline.
Kosman said that Diamond pays around $600M per season to its contracted NBA teams, so a reduction of $120M for the upcoming season would be quite the haircut in revenues for them.
It seems likely that the leagues will accept Diamond's offer, if only because it comes too close to the start of their seasons. However, with the NHL's puck drop and the NBA's tip-off coming closer to view, both leagues have to consider what to do if they do not accept the offer. As noted by Kosman:
"Diamond will shut its doors but not until it makes some money from more profitable contracts so the creditors get some recovery, two sources said. That also would help the NBA and NHL which are not well prepared for a liquidation, sources said. Another possibility is Diamond would stop broadcasting games in markets where it is losing money if it cannot reach an overall deal with either the NBA or NHL, according to the first source. The NBA is prepared to stream games that Diamond drops in their local markets if a deal is not worked out."
The NBA arrangement could be similar to what Major League Baseball has done for the Arizona Diamondbacks and San Diego Padres, two of the teams that Diamond had severed ties with during the regular season after the sides were unable to come to an agreement over reduced rights payments.
Similar to MLB.tv and the linear Extra Innings, NBA League Pass streams both home and away broadcasts of every game that is not blacked out locally or shown nationally.
The NHL's backup scenario isn't public just yet, so it's unclear what the league would do if Diamond were unable to broadcast local games for a contracted team. While NHL Center Ice still exists for cable and satellite subscribers, it's also available on ESPN+ as Disney added local broadcasts to its streaming service upon regaining NHL rights.
Some teams have already made their own splashes in terms of broadcasting alternatives. The Phoenix Suns moved to broadcast TV after severing ties with Diamond earlier this spring. The Utah Jazz, which was not under Diamond but lost their channel after Warner Bros.
Discovery announced it was selling its regional channels, also moved back to broadcast TV. The Stanley Cup champion Vegas Golden Knights, which has a rights deal with Scripps Sports, are pushing their own streaming service in advance of their Cup defense season.
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