Bally Sports' Owner Sues Parent Company Over $1.5 Billion Fraud Allegations

The owner of Bally Sports has sued its parent company over its financial situation.

Diamond Sports Group, which declared bankruptcy earlier in 2023, is suing Sinclair Broadcast Group for what it claims are massive, fraudulent withdrawals. Essentially, Diamond is alleging that Sinclair improperly withdrew around $1.5 billion from the regional sports side of the business.

Diamond operates the Bally Sports channels, which had to forfeit the right to broadcast games for multiple MLB teams this season.

The San Diego Padres were the first to take over their own broadcasts from Bally Sports, with the Arizona Diamondbacks following soon afterward.

READ: DIAMONDBACKS ARE LATEST TEAM TO TAKE OVER TELEVISION BROADCASTS

Diamond claims that Sinclair started withdrawing from the company's assets soon after acquiring it in 2019. According to the lawsuit, Sinclair knew that Diamond was "careening towards bankruptcy" after revenue from cable and satellite subscriptions declined.

According to Reuters, a complaint filed in bankruptcy court said that Sinclair planned to "milk" Diamond and Bally Sports for its own benefit.

"Throughout this entire period of precipitous decline, Sinclair unrelentingly continued to carry out its plan to 'milk' Diamond for Sinclair's own benefit and to extract whatever value it could salvage before Diamond's inevitable bankruptcy," a Diamond statement read.

PHOENIX, AZ - APRIL 26: The Arizona Diamondbacks logo on the field during the MLB baseball game between the Chicago Cubs and the Arizona Diamondbacks on April 26, 2019 at Chase Field in Phoenix, Arizona. (Photo by Kevin Abele/Icon Sportswire via Getty Images)

Bally Sports Group Suffered From Parent Company Decisions, According To Lawsuit

The lawsuit alleges that Sinclair collected "extortionate" fees and took most of the proceeds from the deal that led to rebranding Fox Sports channels as Bally Sports.

Sinclair, for its part, says the allegations are without merit.

The allegations open up a fascinating new chapter in the collapse of the most influential regional sports network in the country.

Essentially, the parent company is supposed to have realized that Diamond had no chance of financial survival, and took its money out quickly, hastening its decline. If that's the case, it's bizarre that the deal was ever completed. Why buy a failing asset if you're Sinclair?

The bankruptcy has mostly hurt MLB teams, some of which failed to receive payments from Diamond Sports Group in 2023. And while the league has to be thrilled that they can now offer blackout free games to local fans, the individual teams have generally taken in less money than they'd have been guaranteed from their television partnership.

The future of local team broadcasts is undoubtedly moving toward streaming, but what part Bally Sports plays in that could be at least partially determined by the results of this lawsuit.