Casino operator Bally’s Corp. doesn’t have any financial responsibility from the meltdown of a nationwide regional sports network that carries the company’s name.
Diamond Sports Group is looking to restructure or eliminate some of the channels under the Bally Regional Sports Network that owns the rights to televise the games of 42 NBA, NHL and Major League Baseball teams. The company, which is owned by the Sinclair Broadcast Group, filed for Chapter 11 bankruptcy protection in Texas last week.
Bally’s acquired the naming rights to what has been Fox Sports in a $125 million deal with Sinclair in 2020 that also included the acquisition of the Bet.Works sports betting platform.
Bally Sports is in many major markets, including Los Angeles, San Diego, Miami, Dallas, Phoenix and Detroit. The casino operator viewed the relationship as a way to promote Bally Bet, the company’s sports betting business, to an audience of potential customers.
However, Bally Bet hasn’t grown at the same rate as the company’s casino operations, which include Tropicana Las Vegas and Bally’s Lake Tahoe.
While legal sports betting is in 33 states and Washington, D.C., Bally Bet is not licensed in Nevada and has operations in just six states: Arizona, New York, Colorado, Indiana, Iowa and Virginia.
On the company’s Feb. 23 fourth-quarter conference call, incoming Bally’s CEO Robeson Reeves said Bet.Works didn’t provide a platform to develop a competitive sports betting product.
“We are confident there are more economical and nimble solutions out there and [Bally’s] has spent the past five months analyzing them deeply,” Reeves said in his prepared remarks. “Sports for us is an acquisition tool. It can drive further engagements for Bally’s brand. So when we approach the choice of technology, we’ll make sure we have that mindset.”
After the bankruptcy was filed, Sinclair split Diamond into a stand-alone company as part of a debt-for-equity swap with its creditors. In a statement, Sinclair executives said Diamond is using the bankruptcy to reset its capital structure and strengthen its balance sheet by eliminating $8 billion of debt.
Bally’s CFO Bobby Lavan said the company “has no liability related to Diamond’s debt and Diamond holds no equity or other ownership rights [in the casino operator.]”
In a statement contained in Bally’s fourth-quarter earnings press release on Feb. 23, Lavan said the company owns its branding and naming rights connected to the sports network.
“We continue to monitor the Diamond situation closely and look forward to working with the new management team,” Lavan said. “Bally’s will continue to promote its brand through multiple means, including our national portfolio of Bally’s branded casinos, various media partnerships … and our global digital portfolio.”
Bally’s has 15 casinos in 11 states. The company is building a $1.7 billion resort-casino complex in Chicago and a smaller casino in Pennsylvania near Penn State University.
Speaking at the Global Gaming Expo in Las Vegas last year, Bally’s CEO Soo Kim said the company was an “omnichannel” business comprised of online and land-based gaming.
“We look at gaming as a service,” Kim said. “Why not expand the pie and deliver gaming and go to where the customer is?”
Diamond said after the bankruptcy filing it would continue to pay rights fees to all teams on the Bally’s Sports network, except for baseball’s Arizona Diamondbacks. The company is seeking to renegotiate rights deals with the San Diego Padres, Cleveland Guardians and Cincinnati Reds.
Televised games involving NBA and NHL teams are less affected given the regular seasons end in April.