By Phillip Swann
The TV Answer Man –@tvanswerman

TV Answer Man, what is your take on these lawsuits with Sinclair and Diamond Sports? Is this the beginning of the end of the Bally Sports channels? — Walt, Scottsdale, Arizona.
Walt, Diamond Sports, the owner of the Bally Sports regional sports networks, has sued its corporate parent, Sinclair Broadcasting, for $1.5 billion for allegedly overcharging for management fees and committing other malfeasance. Sinclair has countered that the fees were proper and it’s threatening to evict Diamond Sports from the company’s offices which are in Sinclair-owned properties. As part of this legal war, Diamond Sports has also sued J.P. Morgan Chase for allegedly helping Sinclair siphon funds from DS during the process when Sinclair set up Diamond as a separate unit. (Sinclair previously was the owner of the Bally Sports channels but it established Diamond as the owner last March and Diamond immediately declared bankruptcy.)

If you’re not totally confused by now, you have either been closely following this financial soap opera every step of the way and/or you have a degree in bankruptcy law. But let me try to provide some clarity and context to these lawsuits and their importance to whether Diamond Sports will continue to operate as the broadcaster of several dozen MLB, NHL and NBA teams.

The Diamond vs. Sinclair fight is largely just a sideshow here. In my view, it will ultimately have little impact on Diamond’s future. The two entities will likely work out some settlement and move on. The real development to watch is whether Diamond Sports can renew its carriage deals with DIRECTV and Comcast this fall and with Charter’s Spectrum TV early next year. If DS loses two of those deals, it will probably be game over. If it loses one, it will struggle and likely have to jettison more TV deals with the pro teams and that could lead to the leagues asking the bankruptcy court to void every team’s contract. (The NHL has already threatened to do that.) Diamond Sports needs those cable and satellite carriage fees to survive.

(Diamond this year has ended its broadcasting deals with the San Diego Padres and Arizona Diamondbacks and opted out of its agreement with the Phoenix Suns. Diamond Sports also terminated its pact with Raycom to carry that network’s ACC college football and basketball games.)

The Sinclair financial mess is getting some headlines now but it’s the behind-the-scenes negotiations between Diamond Sports and the three largest pay TV operators that matters most here.

Walt, hope that helps. Happy viewing and stay safe!

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— Phillip Swann