By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, is there anything new with the Phoenix Suns and their TV deal with Gray Television and the lawsuit with the Bally Sports owner? Very excited to see the Suns games on local TV for free!! — Gary, Scottsdale, Arizona.
Gary, the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury announced in late April that they have signed an agreement with Gray Television to broadcast their entire regular seasons on local Arizona TV channels starting with the 2023-23 season. Team officials have suggested the games would be available for free. See this article for more details.
However, Diamond Sports, which in March declared bankruptcy and is seeking to reorganize its regional sports network business, which includes the 19 Bally Sports RSNs, has filed an emergency stay motion to block the Gray deal. The company alleges that its contract with the Suns to carry its games on Bally Sports Arizona gave it the right of first refusal, meaning it could match any offer another company made for the Suns’ rights after its contract with the team expired.
Diamond says the Suns did not allow it to match the Gray offer, which the company says violates bankruptcy law and damages its effort to reorganize.
The NBA team, however, filed a motion yesterday in the bankruptcy court that says it did try to negotiate a new deal with Diamond after the old agreement expired, according to an article by Law360. The Suns say that since the old contract expired, it has the right to find a new broadcasting partner.
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“Specifically, by its terms, the agreement expires at the end of the 2022-23 NBA season, and, at this point, Diamond has no rights to any future Phoenix Suns games,” the motion states, according to Law360.
The Suns add that Diamond’s deadline to extend its rights expired and therefore the Suns were free to sign the new agreement with Gray.
The team charges that Diamond is trying to use the bankruptcy filing to exact wider rights than were actually in its contract with the Suns.
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It’s unclear when the Texas bankruptcy court will rule on the two motions. But when it does, the verdict will become must-reading for team owners and league commissioners who are contemplating what life may be like without regional sports networks.
Gary, hope that helps. Happy viewing and stay safe!
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— Phillip Swann
This was actually in a footnote and not the Suns argument. “Specifically, by its terms, the agreement expires at the end of the 2022-23 NBA season, and, at this point, Diamond has no rights to any future Phoenix Suns games,” A big part the Suns argument is a) the Suns and Diamond negotiated for almost a year between December 2021 and October 2022 and could not come to a renewal agreement. So after the Suns Final Offer to Diamond was rejected, they went on the market and started negotiating with other broadcasters. The Suns do say they tried to get in contact with Diamond to continue negotiations and either not getting a response or being told “Diamond promised us and our consultant that a
new offer for the Team’s future media rights would be forthcoming, but Diamond never made any
such offer. These ongoing claims that meaningful negotiations would begin caused us to delay in
our negotiations with other third parties. Exacerbating the delay, it was difficult even to pin down
who we should be engaging with at Diamond, or who had authority to negotiate, due to significant
turnover among Diamond’s personnel during this same period.” b) that Gray Television agreement is more favorable to the team because there is the big difference between a cable only RSN vs. over-the-air station when it comes to the added value of advertising due to how many more fans will be able to watch. The Suns argue that it shouldn’t trigger the backend rights agreement because of the difference. This is also where that footnote is referenced.
Also, I did noticed in regards to the Mercury at in a footnote in the Suns Objection and again the end of Gray’s Objection pretty much says the Mercury should not be affected.
“As previously discussed, Gray understands that the Debtors have no existing or expiring rights agreement with respect to the Mercury and do not allege any violation of the automatic stay with respect to that team. Accordingly, there is no basis to void the Term Sheet with respect to the Mercury.”