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Diamond Sports Group, the bankrupt operator of regional sports networks (RSNs) currently bearing the Bally’s Sports name, is asking a court to allow it to rebrand to FanDuel as soon as possible.
In a Tuesday filing with the US Bankruptcy Court, Southern District of Texas, Diamond said it must shift to FanDuel branding soon because the NHL season has already commenced, the 2024-25 NBA campaign starts next week, and because the broadcaster’s agreement with Major League Baseball (MLB) expires at the end of the season. MLB is currently in the midst of its league championship series, meaning only the World Series is left before the 2024 season ends.
In June, FanDuel, a unit of Flutter Entertainment (NYSE: FLUT), reached an agreement with Diamond to replace Bally’s (NYSE: BALY) as the sponsor of 18 RSNs.
With the media group dealing with bankruptcy and investors pressuring the gaming company to find avenues to conserve cash, the agreement with FanDuel is viewed as central to Diamond’s efforts to clear Chapter 11 protection.
FanDuel Financing to Diamond Sports Unclear
For now, it’s not clear exactly how much FanDuel will pay to Diamond Sports for the RSN naming rights. In November 2020, Bally’s reached an agreement with Sinclair Broadcast Group to apply its name to 21 RSNs owned by the media entity. At that time it was reported that the regional casino operator agreed to pay $85 million over 10 years to put its branding on the RSNs.
In the filing with the bankruptcy court, Diamond said it would garner “a significant rights fee payment and certain media and advertising spending commitments” from FanDuel, and that the sportsbook operator gains rights to buy up to 5% of the broadcaster’s equity when it exits bankruptcy protection.
(There is) the potential for future integrations of the Debtors’ and FanDuel’s respective products and offerings,” said Eric Ratchman, Diamond’s president of distribution and business development, in a legal document.
FanDuel, the largest US online sportsbook operator, already has a solid cable television footprint with its FanDuel TV network. Previously, that was a horse racing-specific network, but it was rebranded into a broader sports offering in 2022.
FanDuel Deal Practical for Diamond Sports
With FanDuel, Diamond Sports gets a branding partner with the financial resources to sustain the relationship, and one that already enjoys significant brand recognition across the US.
With Diamond Sports, there are sources of allure for FanDuel. The betting company would potentially be applying its name to RSNs that broadcast games of 38 Major League Baseball (MLB), NBA, and NHL teams.
In the court filing, Rachtman noted there’s “a high degree of alignment” between the areas in which the RSNs broadcast and the states in which FanDuel offers online sports betting. States that check both boxes include Arizona, Kansas, North Carolina, and Ohio.
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