Bally Sports Bankruptcy Can Affect the Salary Cap

[mll]

 

[mll]

Friedman in his 32 Thoughts:

 

4. Before we get back to more deadline considerations, wanted to address a continuing story. On Wednesday, Diamond Sports Group announced it would skip a $140 million payment, thereby entering a 30-day grace period that most likely leads to a bankruptcy filing. It’s not the most front-facing sports story, but it is a monumental business development. 

 

Many of our great US-based fans watch regional NHL games on Bally’s, which is owned by Diamond. This collapse is being felt across hockey, MLB and the NBA with more than 40 teams and almost $1.8B in rights fees at risk. The NHL had a Board of Governors meeting hours after the announcement. Best I can gather, there is still no absolute clarity where this is going. The good news is teams are expecting to be paid for the time being, the bad news is, apparently, some teams have been warned it will not be the full amount. 

 

The worst-case scenario is that a bankruptcy allows Bally’s (or whoever ends up controlling it) to walk away from everything, but the more likely outcome seems to be that it will pick-and-choose what it wants to keep and what it may drop or try to restructure. So, if you’re a valuable regional property, you feel as good as you can. If not, you’re sweating unless these leagues come up with a good backup plan. 

 

And, we also worry about a potential effect on the cap. MLB Commissioner Rob Manfred, speaking in Phoenix, said, “Obviously our first choice would be that Diamond pay the clubs what they're contractually obligated to pay them, but because I guess I'm a contingency planner by nature, we are prepared no matter what happens to make sure that games are available to fans in their local markets.” He added that MLB could sell games to other providers, but admitted it would be very difficult to equal rights fees that would be lost. 

 

Edited February 16, 2023 by mll

[Drive-By Body Pierce]

HEADLINES

 

ESPN.COM: The owner of Bally Sports regional networks skipped $140 million in interest payments due Wednesday, starting a 30-day grace period that could be the prelude to a bankruptcy filing.

 

Bally is owned by Diamond Sports Group, a subsidiary of Sinclair Broadcast Group Inc. It provides regional coverage to 12 NHL teams.

 

SPECTOR’S NOTE: Those 12 NHL teams are the Los Angeles Kings, Anaheim Ducks, Arizona Coyotes, Dallas Stars, St. Louis Blues, Minnesota Wild, Detroit Red Wings, Columbus Blue Jackets, Nashville Predators, Carolina Hurricanes, Tampa Bay Lightning and Florida Panthers.

 

The Athletic’s Michael Russo tweeted yesterday that the NHL Board of Governors held an impromptu conference call to discuss the situation. No word yet from the league regarding the outcome of those talks.

 

This isn’t expected to affect regional coverage for the remainder of this season as the rights for those games were already paid before the start of the season. However, it will be a problem for next season and beyond if the league is left scrambling to find a replacement for Bally.

 

This won’t affect the salary cap for 2023-24 as that’s based on hockey-related revenue earned this season. However, it could have a substantial impact on the cap for 2024-25.

 

The salary cap is projected to increase by just $1 million for next season as the players still have to pay back the remainder of their escrow debt to the owners arising from the shortened seasons due to the pandemic. There is speculation suggesting the league and NHLPA perhaps reaching an agreement to increase it by up to five percent.

 

For 2024-25, the salary cap is forecast to jump to between $3.5 million and $4 million, rising to between $87.5 million and $88 million for 2024-25. It is also projected to rise by $4 million in 2025-26 to $92 million. However, the potential hit to hockey-related revenue from losing Bally’s regional coverage could adversely affect those projections.

 

 

https://www.spectorshockey.net/2023/02/nhl-morning-coffee-headlines-february-16-2023/

Edited February 16, 2023 by Drive-By Body Pierce

[mll]

 

[24K PureCool]

Not gonna lie, Bally and Roots going down might be the best thing for the NHL broadcasting as those two are the biggest offenders on blacking out games and making them highly inaccessible with the lack of any streaming options.