FanDuel set to take over Diamond RSN branding from Bally Sports

If you watch your local NBA or NHL team on one of Diamond Sports regional sports networks this season, get ready for a lot of not so subtle messaging from FanDuel, the largest sportsbook in the U.S.

Diamond in a bankruptcy court filing last night confirmed FanDuel would be taking over as naming rights partner for the chain of RSNs, which have operated under an expiring deal with the Bally Sports brand. Outlining key terms of the agreement in the filing, Diamond promised integration between the RSNs and FanDuel promotions.

“The Debtors will designate FanDuel as its exclusive integration partner in specified sports betting and related online wagering / gaming categories across the RSN Services and will provide substantial and prominent integrations to FanDuel across the RSN Services,” the motion read.

The motion asks the bankruptcy court to approve the deal by October 21, or FanDuel can walk away from it. FanDuel has several other opportunities to exit, including if the Chapter 11 exit plan is not approved next month, and by April 30, 2025. If FanDuel does not trigger an exit by that date, the partnership will flow into a multi-year agreement.

Timing of the branding switch from Bally Sports to FanDuel should become more clear following the court’s approval although it could happen as early as next week.

Diamond filed for Chapter 11 protection in March 2023 after years of cord cutting and steep debt payments eviscerated the bottom line. Once home to 19 RSNs and over 40 MLB, NBA and NHL teams, those figures are starkly down.

Diamond has cut ties with many of its MLB teams, thus far committed to only keeping the Atlanta Braves. However there are five teams – the Kansas City Royals, the St. Louis Cardinals, the Los Angeles Angels, the Cincinnati Reds and Miami Marlins – in joint ventures with Diamond that the company has not decided yet whether to keep. Those decisions are outside the bankruptcy jurisdiction because the JVs are not part of the Chapter 11. MLB expects to know Diamond’s decision by next month’s hearing to approve or reject the exit plan.

As for FanDuel, terms were largely not disclosed in the public filing, other than the betting company has options and warrants for up to 10 percent of the new Diamond Sports. 

“[T]he FanDuel Term Sheet contains provisions that would allow FanDuel to purchase up to 5% of the equity in the reorganized Debtors and earn performance warrants exercisable for up to 5% of the equity in the reorganized Debtors, which incentivizes FanDuel to use its best efforts to broaden the Debtors’ subscriber base and provides FanDuel with an opportunity to co-invest in the Debtors’ reorganized business,” the motion reads.

FanDuel also promises to supply content to the RSNs.

“Following the initial term, FanDuel will deliver and license to the Debtors certain content from FanDuel TV and the Debtors will have the right and obligation to distribute such content on their services in accordance with the terms and conditions set forth in the FanDuel Term Sheet,” according to the motion. 

FanDuel can also sell streaming subscriptions to the RSNs. “The Debtors will grant FanDuel the right to resell the Debtors’ streaming product,” the court filing said. Because the company can buy equity, it should be incentivized to sell subscriptions.

Replacing Bally Sports is one of the key commercial steps Diamond needs in order to convince the court it can emerge from Chapter 11, alongside recently negotiated distributions deals, and the legal settlement with parent company Sinclair. Sinclair will sever all ties with Diamond if it is approved to exit the Chapter 11.

Diamond and its advisers began contacting potential Bally replacements in February, narrowing the candidates to six, according to the motion. Diamond quickly settled on FanDuel and recently reached an agreement. In addition to rights fees and content, the sports betting platform is obligated to spend on advertising on the RSNs.