Diamond Sports eyes exclusivity extension to implement cooperation deal

By Sarah Lizee

Olympia, Wash., Nov. 29 – Diamond Sports Group, LLC is seeking a third extension of its exclusive periods to file and solicit votes on a Chapter 11 plan, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

Specifically, the company asked the court to extend the exclusive plan filing period through March 28 from Nov. 29 and the exclusive solicitation period through May 28 from Jan. 29.

On Nov. 6, the debtors achieved a critical milestone in their Chapter 11 cases by reaching a cooperation agreement with first-lien lenders, second-lien lenders and the official committee of unsecured creditors.

The agreement memorializes those parties’ support for a baseline business plan as well as a settlement of key intercreditor issues that will form the basis for a confirmable Chapter 11 plan, Diamond Sports said.

In addition to the support of the committee as a fiduciary for all unsecured creditors, the cooperation agreement is currently supported by holders of more than 81% of first-lien claims and large holders of second-lien claims.

The cooperation agreement and underlying business plan also enjoys the support of the NBA, whose team and league modified rights agreements position the debtors to operate profitably through the 2023-2024 seasons, the debtor added.

The court approved the debtors’ entry into the cooperation agreement on Nov. 15.

“Although the cooperation agreement represents a significant breakthrough in these cases, work remains to be done to capitalize on this progress and to implement the agreed transactions and settlements,” Diamond Sports said.

The cooperation agreement is conditioned on resolving Sinclair’s and the MLB’s respective motions to compel the debtors to assume or reject their contracts. It is also conditioned on finalizing the terms of an agreement with the NHL.

The debtors also have to file a Chapter 11 plan within 10 days of the cooperation agreement becoming effective.

Because the business plan calls for the debtors to operate their business through the 2023-2024 seasons to maximize distributable value, the parties to the cooperation agreement consented to the extension of the exclusivity periods through the statutory maximum so long as the debtors file a plan in time.

Diamond Sports Group is an independently managed and unconsolidated subsidiary of Sinclair Broadcast Group. Diamond owns the Bally Sports Regional Sports networks, a provider of local sports. The Baltimore-based company filed Chapter 11 bankruptcy on March 14, 2023 under case number 23-90116.

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