Bankrupt Diamond Sports Group has sued the NBA's Phoenix Suns, as well as the WNBA's Phoenix Mercury, accusing the pro basketball franchises of breaching their local TV contracts by agreeing to five-year local TV partnership to show their games with Gray Television and Kiswe Mobile.
“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,” Diamond wrote in the emergency motion for a stay.
“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," Diamond's complaint added.
Diamond is asking the Texas bankruptcy court overseeing its restructuring to void the Suns and Mercury's deals with Gray and Kiswe, as well as award it damages.
The suit was first reported by The Athletic (opens in new tab).
Team reps have yet to comment. But responding to Diamond's public complaints last week last week, Suns and Mercury CEO Josh Bartelstein said in a statement, “Diamond’s position is totally inaccurate. We are moving forward with this deal and could not be more excited about what it means for our fans and our future.”
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Diamond is the independent subsidiary set up by Sinclair Broadcast Group to manage 19 Bally Sports branded regional sports networks. Diamond's TV deal with the Suns and Mercury expires this year, and it claims it has, under contract, the right to match any outside local TV deal the teams make.
Late last week, the teams announced a deal to show 70 Suns games across Gray TV local broadcast stations across Arizona, as well as stream their games direct-to-consumer via Kiswe Mobile.
Diamond contends those five-year deals fail to generate the revenue it is offering the Suns and Mercury for a renewal on RSN Bally Sports Arizona.
Diamond is currently try to trade equity in Diamond to its creditors in exchange for around $8 billion of debt relief.
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!