Stars’ Local TV Deal Goes Supernova as Team and RSN Agree to Split

The Dallas Stars are about to become the latest NHL team to cut ties with its local TV partner, as the company that owns a majority interest in the club’s hometown RSN has asked a Houston bankruptcy court to approve a split.

In a motion filed late Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas, Diamond Sports Group requested permission to dissolve its rights deal with the Stars in advance of the 2024-25 NHL season. In the course of ongoing discussions between the Stars and the principal owner of Bally Sports Southwest—Diamond controls 90% of the network, with MLB’s Texas Rangers holding the remaining stake—the team’s front office has “requested that the parties mutually terminate” the existing rights agreement, which expires next May.

Diamond agreed to the Stars’ proposal after determining that advertising and affiliate revenues generated by via the RSN’s telecasts of the team are not sufficient to offset the rights fees. “[T]he debtors have determined that the costs associated with performing under the Stars agreement for its remaining term, including payment of substantial rights fees, outweigh the revenues the debtors are able to obtain through broadcasting Stars games,” Diamond counsel John Higgins wrote.

As part of a contingency plan that’s been evolving over the past several months, the Stars are said to be looking into partnering with a tech company to launch a direct-to-consumer app that would allow local fans to stream the team’s games. As a bonus incentive for Stars enthusiasts, games streamed on the ad-supported platform would be accessible at no additional charge.

A local TV deal is also said to be in the works, although nothing has been finalized.

The attorney has asked Judge Christopher Lopez to authorize Diamond’s rejection of the contract by July 11—exactly one week before the deadline for creditors and league partners to object to the company’s official reorganization plan.

If the judge approves the dissolution of the legacy deal, the Stars will be the second NHL franchise to split from Diamond this month. The day before the motion was filed, the Florida Panthers announced they’d be moving their in-market games to over-the-air Scripps stations in Miami, West Palm Beach and Fort Myers.

In the absence of the Stars, Diamond will be left with nine NHL teams on its roster, down from the original count of an even dozen. These include the Anaheim Ducks, Carolina Hurricanes, Columbus Blue Jackets, Detroit Red Wings, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues and Tampa Bay Lightning. Last November, the Vegas Golden Knights unknowingly foreshadowed the Panthers’ move when they capped their triumph in the Stanley Cup Final with a shift from their RSN home to an in-market Scripps station.

The Stars’ proposed exit may test the viability of Bally Sports Southwest, which also carries Dallas Mavericks games. In November, Mark Cuban said the Mavs would look to end their association with the RSN following the 2023-24 NBA season. On the baseball side of the ledger, the Rangers’ deal with Diamond expires at the end of the 2024 MLB campaign.

Diamond shuttered Bally Sports Arizona last October, in the wake of the termination of its deals with the Arizona Diamondbacks, Phoenix Suns and Arizona Coyotes. Should a similar fate befall the Dallas operation, Diamond’s slate of RSNs will stand at 17.

Diamond’s confirmation hearing is scheduled for July 29, with proceedings expected to carry over to the following day.