Bally Sports Owner Files for Bankruptcy, Seeks to Shed $8B Debt
Under the Restructuring Support Agreement (RSA), the company seeks to eliminate multi-billion-dollar outstanding debt
The broadcaster behind Bally Sports regional sports networks (RSN), Diamond Sports Group (DSG) announced Tuesday it is in the process of finalizing a Restructuring Support Agreement (RSA) with companies that hold the majority of its debt, as well as Sinclair Broadcast Group. This is a strategic move that ultimately seeks to eliminate a debt of more than $8 billion that is outstanding for the company.
However, in order to implement the RSA, DSG confirmed that it filed for Chapter 11 protection with the US Bankruptcy Court within the Southern District of Texas. Ultimately, the company’s plan is to strengthen its balance sheet by implementing the restructuring and using the proceedings. At the same time, DSG plans to continue the broadcasting of high-quality sports content in the US.
The latest announcement reveals that DSG plans to keep Bally Sports operational during the complex Chapter 11 process. Moreover, DSG said that it currently has some $425 million in cash which can help with the restructuring and boost its business.
“The RSA Diamond is finalizing with creditors and Sinclair provides that Diamond will separate its business from Sinclair and become a standalone company,“
reads a statement released by Diamond Sports Group
The RSA Represents a Strategic Move
David Preschlack, DSG’s CEO, explained: “The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the Company for long-term success and has determined that the best path forward for the Company and its stakeholders is to restructure through a Chapter 11 process.”
The CEO added that the company is engaging in this process in an effort to strengthen its balance sheet, reset its capital structure and eliminate some $8 billion in debt. Preschlack added: “The financial flexibility attained through this restructuring will allow DSG to evolve our business while continuing to provide exceptional live sports productions for our fans.”
According to Preschlack, DSG will not stop broadcasting games that ultimately help connect sports teams and leagues with their fans. Finally, he said that the company hopes to be revitalized by the restructuring and become even stronger than before.
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