The Ohio Cup Trophy on top of a Bally Sports logo prior to a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
George Kubas | Diamond Images | Getty Images
The courtroom continues to heat up for Diamond Sports Group, the largest owner of regional sports networks.
On Thursday, Diamond will ask a bankruptcy judge for permission to appoint mediators as it is negotiates with creditors to reach a reorganization plan. The company said in court papers it needs to meet “substantial plan progress” ahead of the start of the upcoming NBA and NHL seasons in October.
Last week, Diamond won court approval to extend the period of time it has to come up with a reorganization plan.
Diamond sought bankruptcy protection earlier this year, burdened by more than $8 billion in debt and the significant headwinds hitting the regional sports networks business as more consumers cancel their cable subscriptions in favor of streaming.
The company and some of its creditors at earlier points in the case, including during a hearing last week, “have indicated that mediation could help [Diamond] sort through myriad issues they must confront on the path toward reorganization.”
Diamond has until Sept. 30 to file a reorganization plan, weeks ahead of the opening of the 2023-24 NBA and NHL seasons. It is vital for Diamond to continue carrying local games on its networks. Since its filing, it has already seen some teams leave its Bally Sports channels due to a breakdown in rights fees discussions.
The prospect of local game rights being up for grabs has attracted broadcast station owners – including Nexstar Media Group, Gray Television and E.W. Scripps Co. – looking to carry the games, CNBC previously reported. The Phoenix Suns recently exited a Bally Sports network for such a deal.
Besides shedding its hefty debt load, Diamond is looking to reset some of its rights deals with teams to reflect so-called market rates.
Last week, a lawyer on behalf of the NHL said the league was in constructive discussions with Diamond, but that “time is of the essence” ahead of the upcoming season.
Sinclair tension
During the bankruptcy process so far, Diamond has faced numerous conflicts – including an ongoing battle with MLB over teams’ streaming rights and rights fees that has led to Diamond dropping some teams from its Bally Sports channels and its recent lawsuit against parent company, Sinclair.
On Wednesday, Diamond unveiled the details behind the lawsuit.
In 2019, Sinclair acquired the portfolio of networks – previously known as Fox Sports – from Disney for $10.6 billion, a required divestiture that was part of Disney’s buyout of Fox Corp.’s 21st Century assets.
Diamond’s more than $8 billion debt load stems from the deal, which also imposed between $400 million to $650 million in debt payments, the company said in court papers.
In the few years since, Diamond’s business, pay-TV providers and other cable channels have experienced accelerating deterioration in their business.
Diamond is now alleging that the ownership of Sinclair only exacerbated its problems.
In court papers, the company said Sinclair has been “milking” Diamond for more than $100 million annually in management fees since the acquisition, despite knowing the dire state of the business. On top of this, Diamond alleges Sinclair, in a “nefarious strategy … wrongfully caused Diamond to transfer more than $1.5 billion in cash and other consideration for the benefit of Sinclair.”
This occurred as Diamond alleges Sinclair knew the RSN business was “careering toward bankruptcy, and it continued after Diamond was unquestionably insolvent.”
“Sinclair has been informed of a lawsuit filed by Diamond Sports Group in connection with their ongoing bankruptcy proceeding. We firmly believe the allegations in this lawsuit are without merit and intend to vigorously defend against them,” a Sinclair spokesperson said in a statement.
Diamond appointed a new board and leadership last year to run its RSN business as it faced an inevitable bankruptcy filing. Diamond is now an unconsolidated and independently run subsidiary of Sinclair.
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.