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The Phoenix Suns last month announced they
would broadcast future games to television and online streaming
through a partnership with Gray Television Inc and video
technology startup Kiswe.
U.S. Bankruptcy Judge Christopher Lopez, however, ruled that the
company could not yet move on from its existing contract with
Diamond Sports Group, a bankrupt subsidiary of Sinclair
Broadcast Group that broadcasts games through its Bally Sports
TV channels.
U.S. bankruptcy law protects debtors from having their contracts
modified or terminated without their consent, and Lopez ruled
that the Suns' new TV deal was void because it interfered with
the Diamond Sports' contractual right to negotiate contract
extension.
Lopez did not award Diamond Sports any monetary damages on
Wednesday, but said that he would consider a request for damages
at a later hearing.
The Suns' attorneys argued that its TV deal with Diamond expired
with the end of the 2022-2023 regular season, and that the new
deal would not interfere with Diamond's rights under its
existing contract.
Lopez was not persuaded, saying that the Suns' "media blitz"
touted the new contract as a done deal despite "one line in the
press release" about the Diamond Sports bankruptcy.
"The Suns are saying one thing outside the court and another
thing inside it," Lopez said.
Phoenix Suns CEO Josh Bartelstein said after the court hearing
that the team would work toward "a fair resolution that will be
in the best interest of our fans, our community, and our
players."
Financial terms of the Phoenix Suns' contracts with Diamond
Sports and with Gray TV were kept sealed in bankruptcy court.
Diamond televises games for nearly half of all teams in the
National Basketball Association, Major League Baseball (MLB),
and the National Hockey League.
Diamond filed for Chapter 11 protection in March with a proposal
to cut $8 billion in debt.
(Reporting by Dietrich Knauth; Editing by Marguerita Choy and
David Gregorio)
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