DIRECTV Blasts Diamond Sports For ‘Improper’ Tactics In Bankruptcy

By Phillip Swann
The TV Answer Man –@tvanswerman
More than 30 years of experience covering TV technology.

DIRECTV says it does not oppose Diamond Sports’ request for a 60-day extension to file a bankruptcy reorganization plan, but it blasts the owner of the Bally Sports regional sports networks for mismanagement since it filed for bankruptcy last March. In a statement to the court filed on Friday, the satcaster urges Judge Christopher Lopez, who’s presiding in the bankruptcy case, to consider the RSN company’s “improper” behavior during the last seven months when deciding whether to grant the reorganization extension.

Why DIRECTV’s Statement On Diamond Sports Matters
DIRECTV’s cautionary statement could make Judge Lopez hesitate before granting the extension since it’s coming from one of the nation’s top carriers of the Bally Sports channels. If the judge does not approve the extension, Diamond Sports may not be prepared to file a reorganization now and could be forced to consider liquidation rather than continuing.

Diamond Sports is trying to reorganize as a profitable unit by ending certain TV rights deals considered unprofitable, negotiating more favorable deals with other teams, and extending carriage agreements with important TV providers such as DIRECTV, Comcast and Charter’s Spectrum TV. DIRECTV recently approved a year-long extension to its carriage agreement with Diamond Sports. But the two companies continue to engage in a war of words and legal challenges with Diamond Sports filing a motion earlier this month to compel DIRECTV to pay for past carriage fees that Diamond says DIRECTV owes it for carrying San Diego Padres and Arizona Diamondbacks games.

The company alleges that DIRECTV stopped paying the fees after Diamond over the summer ended its agreements to broadcast the Padres and Diamondbacks games. In its statement on Friday, DIRECTV suggests Diamond Sports is wasting time seeking fees for teams it no longer carries. The satcaster says Diamond last spring also wasted time and resources on a motion designed to force Major League Baseball teams to reduce their fees for carrying their games.

“The Debtors (Diamond Sports) recently decided to pursue a similar tactic against DIRECTV, one of their largest and most important partners, by using the automatic stay as a sword to demand payments from DIRECTV for rights they are no longer providing to DIRECTV, while DIRECTV is compelled as a result of the Debtors’ own choices to pay MLB for the very same content that
MLB no longer provides to the Debtors. These actions, which are just two examples, have done little to provide certainty to the teams, leagues, distributors and customers that depend on the Debtors to provide sports fans across the country have access to regional sports content,” DIRECTV says in the statement.

Diamond Sports lost its MLB fee challenge but says its contract with DIRECTV entitles it to continue receiving fees for the Padres and Diamondbacks channels after ending their agreements with the teams. The Diamondbacks channel, Bally Sports Arizona, stopped broadcasting two days ago.

DIRECTV says the two challenges, and other moves over the last seven months, has left the teams doubtful whether Diamond Sports can survive. Diamond’s Bally Sports channels has the regional TV rights to 15 NBA teams, 12 NHL teams and 12 MLB teams.

“The Debtors’ lack of progress and the continuing uncertainty of these cases puts undue pressure on these parties, which are forced to incur costs, contingency plan for innumerable scenarios, and potentially face significant business disruption,” DIRECTV says.

— Phillip Swann