Bally Sports Arizona owner sues Suns, Mercury

May 3, 2023, 9:13 AM | Updated: May 4, 2023, 10:16 am

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Diamond Sports, the bankrupt operator of Bally Sports Arizona, sued the Phoenix Suns and Mercury, plus two media partners on Wednesday after the teams announced a move to Gray Television and Kiswe, a streaming service, according to The Athletic.

The Suns and Mercury announced Friday they agreed to a five-year television and streaming contract, departing the Bally Sports Arizona regional network.

The deal is “subject to the approval of the NBA and WNBA and any required resolution with the incumbent regional sports partner,” according to their press release.

The Suns were still under a contract agreement with Diamond Sports through this season. But Diamond Sports has the right to match any new TV deal.

“Nobody is surprised by this lawsuit and it will not stop the Phoenix Suns and Mercury from making our games available to as many people as we possibly can,” Suns owner Mat Ishbia said in a statement responding to the lawsuit.

“The fans, players, and everyone in our organization knows this is how all of us win together, on and off the court. I firmly believe the future success of the NBA and WNBA is about getting our product to everyone who wants it versus just the people who pay for it.”

Diamond Sports, which on Friday issued a statement claiming the franchises breached their contract, believes the current deal remains in place through this ongoing NBA season. The network was not scheduled to carry any more Suns playoff games after the first round.

“The Suns’ failure to comply with their contractual duties, and Diamond Arizona’s potential loss of approximately 70 games of NBA content provided by the Suns each season, puts Diamond Arizona’s business at significant peril, thereby directly threatening its ability to reorganize,” Diamond wrote in the emergency motion for a stay, according to The Athletic.

“The Suns’ deliberate disregard of its contractual duties to Diamond Arizona is specifically the type of action the automatic stay is meant to protect against.”

As The Athletic’s Daniel Kaplan explains, Diamond believes the automatic stay is part of the bankruptcy status where current contractual obligations are frozen to allow for the company to reorganize.

The Phoenix Business Journal reports that documents filed in court say that the Suns and Mercury had sent a “final offer” to Diamond about a new deal on Oct. 14, 2022, which was rejected. Diamond told the franchises it would like to continue negotations.

The Suns and Mercury on April 19 told Diamond of an offer from Gray and Kiswe. Bally Sports’ operator responded six days later, but on Friday, the teams announced they had accepted the deal.

Diamond sent a letter to the Suns and Gray before their announcement of a new agreement, per Kaplan.

The week before the Suns announced the media deal, Diamond sent a letter to Gray and the Suns “demanding (a) that the Suns and Gray immediately cease and desist from entering into and announcing a new deal and (b) that the Suns comply with their obligations under the Agreement,” according to Diamond’s court filing. “Diamond Arizona made it clear in both letters that it viewed the actions of the Suns and Gray as a willful violation of the automatic stay, breach of contract by the Suns, and in Gray’s case, also a tortious interference with Diamond Arizona’s Agreement with the Suns.”

New Suns and Mercury owner Mat Ishbia told Burns & Gambo last week that he was not concerned about potential litigation from Diamond Sports.

“I’m not worried about it at all,” Ishbia said. “We’re doing right by the fans and community. … It’s really not even a concern of mine. The reality is that company’s got their own issues, we wish them nothing but the best, they were great for us for a while.

“I hope they’re successful in anything they do but we’re focusing on what’s best for the Phoenix Suns and the Phoenix Mercury and our fan base, and that’s why I made that decision.”

Gray Television includes KTVK (Arizona’s Family 3TV), KPHO (Arizona’s Family CBS5) and the statewide KPHE (AZ Family Sports Network), which will help the teams reach the Phoenix, Tucson and Yuma media markets. The deal also includes Kiswe, an interactive video company.

Subscribers to a Suns- and Mercury-branded Kiswe app will have game streaming available as part of the deal that is meant to serve traditional TV users, cable users and cord-cutters.

With the new deal, the franchises expect to reach 2.8 million households, tripling the current availability by being available on traditional over-the-air TV as well as streaming.

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Bally Sports Arizona owner sues Suns, Mercury