Comcast Spat Threatens Diamond Restructuring, Sports Leagues Say

Jonathan Randles, Bloomberg News

An employee walk past signage inside Comcast Corp. headquarters in Philadelphia, Pennsylvania, U.S., on Monday, Oct. 24, 2016. Comcast Corp. is scheduled to release earnings figures on October 26. Photographer: Charles Mostoller/Bloomberg , Bloomberg

(Bloomberg) -- Diamond Sports Group said negotiations with Comcast Corp. remain open despite warnings from Major League Baseball that the cable provider’s decision to drop its regional sports channels could force the league to set up alternative broadcasts for fans of a dozen teams.

The dispute with Comcast is harming its teams, their fans and jeopardizing Diamond’s plan to restructure and exit bankruptcy later this year, MLB lawyer James Bromley said Wednesday during a court hearing.

MLB’s concerns were echoed by attorneys for the National Basketball Association and National Hockey League who warned Diamond that the dispute must be resolved soon in order to keep those leagues’ support for its proposed restructuring deal.

Diamond has been “an undependable partner” and the dispute with Comcast has been harmful to MLB and Comcast subscribers who are now unable to watch games, Bromley said.

MLB could be forced to set up alternative broadcast options for Comcast subscribers if the dispute isn’t resolved soon, Bromley said. Last year, the league made similar accommodations to broadcast Arizona Diamondbacks and San Diego Padres games after Diamond dropped those teams.

Comcast said in a statement last month that the company has “been flexible” with Diamond but that they’ve been unable to reach a deal “that’s fair for our customers.”

“Everything, right now, is up in the air,” Bromley said.

Judge Christopher Lopez is scheduled to consider approving the deal in June. If approved, the restructuring would save the broadcaster from liquidation and is supported by most of Diamond’s debt holders and Amazon.com Inc.

Diamond lawyer Brian Hermann said Wednesday that the broadcaster is still negotiating with Comcast and is hopeful that talks will ultimately result in a new, multi year agreement. The bankrupt Sinclair Inc. subsidiary has already struck agreement with larger cable partners Cox Communications Inc. and DirecTV, Hermann said.

Diamond is also close to reaching a new agreement to rename its Bally Sports channels, a sign of additional support for the company’s business plan, Hermann said. The deal Diamond had offered Comcast includes similar terms to those agreed to by DirecTV and Cox, he said.

Hermann described the Comcast dispute as “a fluid situation” and said Diamond will continue to keep the sports leagues and its other creditors apprised of its discussions with the cable company.

The case is Diamond Sports Group LLC, 23-90116, US Bankruptcy Court, Southern District of Texas.