Reorg reviewed Diamond Sports’ options to address its capital structure. Parent company CEO Chris Ripley disclosed on May 5 that the company is “in active discussions with a large segment” of Diamond’s “capital constituency,” after previously saying it is “very likely” that Diamond would pursue an exchange offer.
Reorg concluded that Diamond’s debt documents provide significant flexibility, allowing the company to incur more than $2 billion of additional first lien debt and transfer $1.4 billion of assets. However, given the nearly 70% decline in normalized EBITDA, as estimated by Reorg, it is critical for investors to understand asset value, intercompany relationships and the changing landscape in the sports distribution model that is causing the severe drop in profitability. The webinar included additional discussion on contractual relationships between Diamond and Sinclair.
Weekly highlights from our global intel and expert analysis