(Bloomberg) — Bankrupt sports broadcaster Diamond Sports Group is seeking court permission to re-brand its network of Bally Sports local channels to FanDuel under a naming rights deal with the betting giant.
Diamond said in a Tuesday court filing that it needs to rebrand now, at the start of the National Hockey League and National Basketball Association seasons, because its current agreement with Bally Sports is set to expire at the end of the Major League Baseball season.
The deal represents a further merger between professional sports broadcasters and major gambling platforms. Revenue from US sports betting is expected to reach nearly $15 billion this year, according to research from Vixio Regulatory Intelligence.
Terms of the FanDuel agreement weren’t disclosed in Tuesday’s court filing. Diamond said it will receive “a significant rights fee payment and certain media and advertising spending commitments” under the agreement. FanDuel will also have the right to purchase as much as 5% of Diamond’s equity after it exits Chapter 11 and earn performance warrants, according to court documents.
Diamond considered FanDuel an attractive business partner because of “the potential for future integrations of the Debtors’ and FanDuel’s respective products and offerings,” Eric Ratchman, Diamond’s president of distribution and business development said in a sworn declaration.
There’s also “a high degree of alignment” between Diamond local sports channels and FanDuel’s online gaming business and their target customers, Ratchman said.
Diamond said it started searching for a new naming rights deal in February and that FanDuel submitted an initial term sheet to the company in March, which was followed by months of further negotiations. Bloomberg News reported in June that it was close to reaching a naming rights deal with FanDuel.
The naming rights deal is part of Diamond’s broader restructuring plan. The company has said it will either reorganize following the 2024-2025 NBA and NHL seasons or wind down its operations. Diamond intends to survive Chapter 11 by cutting debt and broadcasting professional hockey and basketball games.
Diamond has been attempting to strike new agreements with Major League Baseball, though that league has announced it will start broadcasting games for additional teams after they dropped existing rights deals.
The case is Diamond Sports Group, 23-90116, US Bankruptcy Court, Southern District of Texas (Houston).
–With assistance from Christopher Palmeri.
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