ST. LOUIS — Diamond Sports Group, a subsidiary of Hunt Valley-based Sinclair Broadcast Group Inc. that owns broadcasting rights for 42 professional sports franchises, including the St. Louis Blues and St. Louis Cardinals, started Chapter 11 bankruptcy proceedings earlier this week, a process that could take years to exit, according to one expert.
Diamond, the parent company of Cardinals and Blues broadcaster Bally Sports Midwest, had its first bankruptcy hearing on Thursday, two days after voluntarily filing for Chapter 11 with plans to eliminate almost all of its $8.6 billion of debt. While Diamond’s lawyers may be busy seeking a deal with creditors, Diamond can only exit bankruptcy after creditors are paid back, which will result in the company being spun off from Sinclair (NASDAQ: SBGI).
“Sometimes it can be four or five years before a company emerges from bankruptcy. Companies can operate in bankruptcy for a long time,” said Karyl Leggio, a professor of finance at Loyola University Maryland. “Diamond will continue to broadcast games, most customers won’t feel anything.”
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