Diamond Sports Nears DirecTV Deal as Clock Ticks on Comcast Carriage

Six months after DirecTV counsel told a Houston bankruptcy court that Diamond Sports Group had “hardly engaged … in meaningful negotiations” for an extension of its carriage deal with the satcaster, an agreement in principle on a multiyear renewal has been hashed out.

While terms of the tentative deal have not been disclosed, the agreement was confirmed by a source with first-hand knowledge of the negotiations. Once all the requisite letters are dotted and crossed, the formal renewal will secure a place on DirecTV’s channel lineup, which boasts a national footprint of some 11.3 million households.

The deal is another major step in Diamond’s ongoing efforts to reorganize its RSN business as it emerges from Chapter 11 bankruptcy protection. Earlier this month, DSG hashed out a carriage renewal with Charter Communications, which closed out the first quarter of 2024 with 13.1 million residential video subscribers. That puts Charter just behind Comcast in the pay-TV pecking order, as the Philadelphia-based cable giant last week reported a headcount of 13.6 million video subs.

Speaking of Comcast, Diamond’s legacy deal with the operator ends at midnight tomorrow. Negotiations are ongoing, although the two parties remain far apart on tiering, with Comcast looking to shift the soon-to-be-rebranded Bally Sports RSNs to a pricier digital package, while Diamond is looking for a more flexible arrangement, one which would lead to a gradual transition away from the operator’s basic-cable lineup.

As recent events have demonstrated, the downstream effects of premium tiering are often hard to overlook. Six months after Comcast moved Root Sports Northwest to its pricier Ultimate TV roster, the Seattle Kraken announced they were jumping ship to a pair of local broadcast affiliates (KONG and KING-5). The NHL expansion team’s new local TV pact will be enhanced by a three-state streaming deal care of Amazon Prime Video.

While time is running out on the current Comcast-DSG pact, most industry watchers believe a renewal will be worked out—even if the talks go into overtime. As Diamond informed the court earlier in the Chapter 11 proceedings, the three operators account for 81% of the company’s total affiliate revenue. (With a combined reach of 38 million subscribers, the Big Three can lay claim to approximately 69% of all the homes that still pay for the traditional pay-TV bundle.)

Once that final piece of the distribution puzzle is in place, Diamond should be in good shape as it prepares for the looming confirmation hearing for its re-org plan. Set to be held on Tuesday, June 18, the meeting before the United States Bankruptcy Court for the Southern District of Texas, Houston Division, is expected to mark the formal end of a process to eliminate some $9.3 billion in debt that began in March 2023.