Diamond Sports Group (DSG), the subsidiary of Sinclair Broadcast Group that operates the Bally Sports regional sports networks (RSNs) in the US, has launched legal action against the Phoenix Suns (men’s) and Phoenix Mercury (women’s) basketball teams.
This comes after those organizations, from the NBA and WNBA, respectively, became the first US basketball franchises to abandon the RSN local media rights format. Late last week, it was announced that they had both struck deals for free Arizona coverage with Gray Television channels and for the creation of a streaming service with video technology firm Kiswe.
DSG – which is in proceedings for officially entering bankruptcy – sued the Suns, the Mercury, and their two new media partners in bankruptcy court yesterday (May 3) and has also filed an emergency motion attempting to block the Suns’ effort.
In a statement made after the two franchises announced their new media rights tie-ups, DSG said the move breached its RSN deal. It is also alleging tortious interference against both Gray TV and Kiswe.
DSG's emergency staying motion said: “The Suns’ failure to comply with their contractual duties, and Diamond Arizona’s potential loss of approximately 70 games of NBA content provided by the Suns each season, puts Diamond Arizona’s business at significant peril, thereby directly threatening its ability to reorganize.
“The Suns’ deliberate disregard of its contractual duties to Diamond Arizona is specifically the type of action the automatic stay is meant to protect against.”
DSG has claimed that while its deal with the Suns does run out at the end of 2022-23, it is still technically active and that the contract gives DSG the first right of refusal if the Suns attempt to conclude another tie-up with a different media outlet.
If not settled, these adversarial proceedings could lead to a trial.
In a statement responding to the lawsuit, Suns' and Mercury owner Mat Ishbia said: “Nobody is surprised by this lawsuit, and it will not stop the Phoenix Suns and Mercury from making our games available to as many people as we possibly can. The fans, players, and everyone in our organization know this is how all of us win together, on and off the court.
“I firmly believe the future success of the NBA and WNBA is about getting our product to everyone who wants it versus just the people who pay for it.”
Under the terms of the deal both franchises have struck with Gray TV and Kiswe, the KTVK station owned by Gray will cover 13 regular season games of the Mercury women's team, as well as all necessary post-season games, and a minimum of 40 fixtures for the men's Suns team. The KPHE channel will cover all remaining action that is not exclusive to national networks, from both teams.
The Suns agreed to a five-year deal and the Mercury to a two-year tie-up.
The NBA has said that the agreement will make Suns and Mercury action available to over 2.8 million households, over three times the number of homes the two teams can reach currently.
Fans will also be able to reach all Suns and Mercury games through a Kiswe-supplied streaming platform, which can be accessed either through a mobile app or through a Smart TV.
In recent months, before it filed for bankruptcy, Diamond missed payments to the Arizona Diamondbacks, the state's Major League Baseball team, alongside other franchises.
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