S&P cuts Diamond Sports

S&P said it cut its issuer credit rating on Diamond Sports Holdings LLC to CCC- from CCC+ and the rating on Diamond Sports Group LLC’s senior secured second-lien debt, consisting of a revolver, term loan and notes, to CCC- from CCC+. The recovery rating remains 4. The agency also downgraded DSG's senior unsecured debt to C from CCC-. The recovery rating remains 6.

“A recession in the first half of 2023 increases the likelihood of a liquidity event or bankruptcy filing. We expect Diamond to generate negative cash flow (after payments to minority shareholders of certain regional sports networks [RSNs]) through at least 2025 due to declining linear distribution revenue, rising sports programming costs, and costs to expand its planned streaming service,” S&P said in a press release.

The outlook is negative.

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