Diamond Sports Group (owner of Bally RSNs) files for Chapter 11 bankruptcy, MLB to produce Padres games after missed payment

[oater]

2 hours ago, gotbeer said:

That makes zero sense.  You are saying that when Disney acquired Fox it acquired 100% of the liability.  But when Diamond acquired the RSN, it acquired limited liability.  

Just because a sale is highly leveraged, doesn't mean that the selling company is keeping any liability.  

That's like saying because Musk's takeover of Twitter was highly leveraged, the landlords can go after the former twitter shareholders because Musk defaulted on leases on Twitter offices.

I did not say that Diamond has limited liability under the contract (other than any relief it gets under bankruptcy laws). To get relief under bankruptcy laws, the debtor has to be insolvent, which does not apply to Disney.

While the terms of a contract are negotiated between the parties, significant financial contracts routinely provide that the contract cannot be assigned without the consent of the other party.  The contract will also provide that even if consent to an assignment is given, the other party is not relieved of liability under the contract.  The reason for these provisions is to prevent a solvent company from avoiding its contractual obligations though a transfer of the contract to an insolvent (or marginally solvent) company.

The Angels contract would be classified as an "executory contract" which means that significant obligations remain unperformed by both parties to the contract. Literally,Disney could not acquire the contract without also assuming the obligations.  Hence its sale to Diamond would not relieve it of the obligations it assumed when it acquired the contract from Fox.  Keep in mind that Disney received significant monies when it sold the contracts to Diamond, so the fact that it remains obligated under the contracts is hardly unfair.

[Amazing Larry]

13 hours ago, Hubs said:

This is hilarious. It’s why I don’t ever go on the political forum. And I’ll refrain from further comment. 

Oh c'mon Hubs. You love me over there lol.

[jsnpritchett]

11 minutes ago, oater said:

I did not say that Diamond has limited liability under the contract (other than any relief it gets under bankruptcy laws). To get relief under bankruptcy laws, the debtor has to be insolvent, which does not apply to Disney.

While the terms of a contract are negotiated between the parties, significant financial contracts routinely provide that the contract cannot be assigned without the consent of the other party.  The contract will also provide that even if consent to an assignment is given, the other party is not relieved of liability under the contract.  The reason for these provisions is to prevent a solvent company from avoiding its contractual obligations though a transfer of the contract to an insolvent (or marginally solvent) company.

The Angels contract would be classified as an "executory contract" which means that significant obligations remain unperformed by both parties to the contract. Literally,Disney could not acquire the contract without also assuming the obligations.  Hence its sale to Diamond would not relieve it of the obligations it assumed when it acquired the contract from Fox.  Keep in mind that Disney received significant monies when it sold the contracts to Diamond, so the fact that it remains obligated under the contracts is hardly unfair.

Again, please provide a real-world example of what you're talking about actually occurring, specifically in an instance in which a company was forced to divest of certain assets as a condition of a larger overall deal getting approved. Not theoretical, an actual real-world example that would be comparable. 

[mmc]

Commissioner Gary Bettman has his annual media address on Saturday. I’d expect him to say something along the lines of, “We’re going to figure it out,” or “I’m not worried” when it comes to the Bally’s/Diamond Sports potential bankruptcy, but teams across the NHL, NBA and MLB warily eye this storyline.

Bloomberg reported last week that Sinclair, which owns the company and holds $55 billion in sports media rights, is prepared to skip a $140-million interest payment next month. The big question is: where does this take us? In the NHL, Bally’s broadcasts games for Anaheim, Arizona, Carolina, Columbus, Dallas, Detroit, Florida, Los Angeles, Minnesota, Nashville, St. Louis and Tampa Bay. There are a lot of unanswered questions, first among them being: Will Sinclair try to cut back payments or cut contracts outright under bankruptcy? If so, what could that mean for payments to teams and, as an extension of that, the salary cap?

A couple of sources indicate that there isn’t a clear answer to these questions, but the affected teams are prepared for the possibility of some financial pain. We all knew that cord cutting would push teams closer to their own streaming plans. We’re moving closer to that, but the worry has always been if streaming your own content will ever make “rights-fee” money. MLB in particular did big business off the regional television model because it’s the big summer sport. Fills up hours and hours of programming when there’s not a lot of competition. One exec called this “the biggest sports story no one is paying attention to.”

[jsnpritchett]

7 minutes ago, mmc said:

Commissioner Gary Bettman has his annual media address on Saturday. I’d expect him to say something along the lines of, “We’re going to figure it out,” or “I’m not worried” when it comes to the Bally’s/Diamond Sports potential bankruptcy, but teams across the NHL, NBA and MLB warily eye this storyline.

Bloomberg reported last week that Sinclair, which owns the company and holds $55 billion in sports media rights, is prepared to skip a $140-million interest payment next month. The big question is: where does this take us? In the NHL, Bally’s broadcasts games for Anaheim, Arizona, Carolina, Columbus, Dallas, Detroit, Florida, Los Angeles, Minnesota, Nashville, St. Louis and Tampa Bay. There are a lot of unanswered questions, first among them being: Will Sinclair try to cut back payments or cut contracts outright under bankruptcy? If so, what could that mean for payments to teams and, as an extension of that, the salary cap?

A couple of sources indicate that there isn’t a clear answer to these questions, but the affected teams are prepared for the possibility of some financial pain. We all knew that cord cutting would push teams closer to their own streaming plans. We’re moving closer to that, but the worry has always been if streaming your own content will ever make “rights-fee” money. MLB in particular did big business off the regional television model because it’s the big summer sport. Fills up hours and hours of programming when there’s not a lot of competition. One exec called this “the biggest sports story no one is paying attention to.”

But I thought everything was fine and everyone would make loads and loads of money! 

[gotbeer]

34 minutes ago, mmc said:

Commissioner Gary Bettman has his annual media address on Saturday. I’d expect him to say something along the lines of, “We’re going to figure it out,” or “I’m not worried” when it comes to the Bally’s/Diamond Sports potential bankruptcy, but teams across the NHL, NBA and MLB warily eye this storyline.

Bloomberg reported last week that Sinclair, which owns the company and holds $55 billion in sports media rights, is prepared to skip a $140-million interest payment next month. The big question is: where does this take us? In the NHL, Bally’s broadcasts games for Anaheim, Arizona, Carolina, Columbus, Dallas, Detroit, Florida, Los Angeles, Minnesota, Nashville, St. Louis and Tampa Bay. There are a lot of unanswered questions, first among them being: Will Sinclair try to cut back payments or cut contracts outright under bankruptcy? If so, what could that mean for payments to teams and, as an extension of that, the salary cap?

A couple of sources indicate that there isn’t a clear answer to these questions, but the affected teams are prepared for the possibility of some financial pain. We all knew that cord cutting would push teams closer to their own streaming plans. We’re moving closer to that, but the worry has always been if streaming your own content will ever make “rights-fee” money. MLB in particular did big business off the regional television model because it’s the big summer sport. Fills up hours and hours of programming when there’s not a lot of competition. One exec called this “the biggest sports story no one is paying attention to.”

 

The good news for the NHL is that their rights fees are significantly smaller than the NBA and MLB.   For instance, I think the Ducks get $25 million in RSN a year, might be lower.  Compared to I think $60 or 75 million from the Clippers and $150 million from the Angels.  Also, the NHL's biggest source of income is gate receipts.  They also just signed a significant national deal with ESPN.  Of course with the salary cap being tied to revenues, there is concern of a drop.  But I don't think the ramifications are as large as the MLB that gets the biggest RSN fees.  

[gotbeer]

1 hour ago, oater said:

I did not say that Diamond has limited liability under the contract (other than any relief it gets under bankruptcy laws). To get relief under bankruptcy laws, the debtor has to be insolvent, which does not apply to Disney.

While the terms of a contract are negotiated between the parties, significant financial contracts routinely provide that the contract cannot be assigned without the consent of the other party.  The contract will also provide that even if consent to an assignment is given, the other party is not relieved of liability under the contract.  The reason for these provisions is to prevent a solvent company from avoiding its contractual obligations though a transfer of the contract to an insolvent (or marginally solvent) company.

The Angels contract would be classified as an "executory contract" which means that significant obligations remain unperformed by both parties to the contract. Literally,Disney could not acquire the contract without also assuming the obligations.  Hence its sale to Diamond would not relieve it of the obligations it assumed when it acquired the contract from Fox.  Keep in mind that Disney received significant monies when it sold the contracts to Diamond, so the fact that it remains obligated under the contracts is hardly unfair.

This would make sense leading up to and at the time of sale.  That would be when the transfer would occur and affected parties can voice their objections, and the sale blocked or stipulations added or contract voided.  Not 2 years after things don't go well.  

[jsnpritchett]

Just now, gotbeer said:

This would make sense leading up to and at the time of sale.  That would be when the transfer would occur and affected parties can voice their objections, and the sale blocked or stipulations added or contract voided.  Not 2 years after things don't go well.  

Yeah, there is absolutely no way this would occur.  

[Hubs]

5 hours ago, jsnpritchett said:

Can you point to a real world example of this occurring, particularly in a situation that involved a government-mandated sale of assets? There is no way Disney is going to be held liable for any potential shortfall in rights fees. 

This would only be realistic if the financing was provided by Disney, which it was not. In that instance, ownership would revert to Disney in the event of a default on the loan. In a normal leveraged buyout, if the financing is done by the seller, then what @oater said is correct.

In the event of a default now, ownership reverts to the banks and they would be responsible for the rights fees as the new owner. This happens in houses when a bank takes a home, they are still responsible for like HOA fees and property taxes. Doesn't mean they'll pay them, but..

[jsnpritchett]

17 minutes ago, Hubs said:

This would only be realistic if the financing was provided by Disney, which it was not. In that instance, ownership would revert to Disney in the event of a default on the loan. In a normal leveraged buyout, if the financing is done by the seller, then what @oater said is correct.

In the event of a default now, ownership reverts to the banks and they would be responsible for the rights fees as the new owner. This happens in houses when a bank takes a home, they are still responsible for like HOA fees and property taxes. Doesn't mean they'll pay them, but..

So, in other words, once again, no one can provide me with a real-world example that's comparable to what we're talking about here.  Cool.   People seem to be ignoring the fact that Disney was FORCED to sell the (then) Fox Sports networks as a condition of government approval for the acquisition of the other Fox entertainment assets.  The government approved both the sale of the Fox Sports assets to Diamond and the acquisition of the other Fox assets. 

[Hubs]

Just now, jsnpritchett said:

So, in other words, once again, no one can provide me with a real-world example that's comparable to what we're talking about here.  Cool.   People seem to be ignoring the fact that Disney was FORCED to sell the (then) Fox Sports networks as a condition of government approval for the acquisition of the other Fox entertainment assets.  The government approved both the sale of the Fox Sports assets to Diamond and the acquisition of the other Fox assets. 

I mean leveraged buyouts happen like this, usually referred to as "seller financing" but I can't recall one on the top of my head. Maybe with ownership like the McCourts??

It isn't the case here so on that we agree.

And technically they were not forced to sell as a condition for the other sale to go through, the sale went through and they were then forced to sell. Disney owned the RSN's for a limited amount of time in 2019.

[jsnpritchett]

Just now, Hubs said:

I mean leveraged buyouts happen like this, usually referred to as "seller financing" but I can't recall one on the top of my head. Maybe with ownership like the McCourts??

It isn't the case here so on that we agree.

And technically they were not forced to sell as a condition for the other sale to go through, the sale went through and they were then forced to sell. Disney owned the RSN's for a limited amount of time in 2019.

Not really.  The deal was approved with the requirement that they would sell those assets. 

https://www.justice.gov/opa/pr/walt-disney-company-required-divest-twenty-two-regional-sports-networks-order-complete

[oater]

6 hours ago, jsnpritchett said:

Again, please provide a real-world example of what you're talking about actually occurring, specifically in an instance in which a company was forced to divest of certain assets as a condition of a larger overall deal getting approved. Not theoretical, an actual real-world example that would be comparable. 

You are the one asserting that a regulatory dvestiture will relieve Disney of liability under the contract--so please provide one real life example of where this happened under an executory contract even though the other party did not consent to release liability.  

[jsnpritchett]

28 minutes ago, oater said:

You are the one asserting that a regulatory dvestiture will relieve Disney of liability under the contract--so please provide one real life example of where this happened under an executory contract even though the other party did not consent to release liability.  

Lol, nice avoidance.  You are the one dropping into a conversation and asserting that certain conditions should apply even though literally no one else anywhere is writing that they should.  As far as I'm aware, there has never been any example of what you're talking about, especially in an entertainment or sports-related divestiture.

[Stradling]

Is anyone actually reporting that they won’t be able to pay out or is this just speculation at this point?

[oater]

11 minutes ago, jsnpritchett said:

Lol, nice avoidance.  You are the one dropping into a conversation and asserting that certain conditions should apply even though literally no one else anywhere is writing that they should.  As far as I'm aware, there has never been any example of what you're talking about, especially in an entertainment or sports-related divestiture.

Here is the DOJ Merger Remedies Manual and I don't find any mention of the divesting entity being rlieved of liability.  My comments have been limited to general contract principles, whereas you have cited no authority for your position.

 

[jsnpritchett]

2 minutes ago, Stradling said:

Is anyone actually reporting that they won’t be able to pay out or is this just speculation at this point?

That is one option on the table if they do declare bankruptcy (which all the articles I've read seem to indicate is extremely likely at this point).  They're going to miss an interest payment this month, which will trigger a process that will inevitably lead to bankruptcy.  In theory, they could still make the payments to the teams to which they hold broadcast rights, even if they declare bankruptcy.

[jsnpritchett]

9 minutes ago, oater said:

Here is the DOJ Merger Remedies Manual and I don't find any mention of the divesting entity being rlieved of liability.  My comments have been limited to general contract principles, whereas you have cited no authority for your position.

 

From the manual:

"Third, the Division will evaluate the “fitness” of the proposed purchaser to ensure that the purchaser has sufficient acumen, experience, and financial capability to compete effectively in the market over the long term. As part of this process, the Division will examine the purchaser’s financing to ensure that the purchaser can fund the acquisition, satisfy any immediate capital needs, and operate the entity over the long term. It must be demonstrated to the Division’s sole satisfaction that the purchaser has the “managerial, operational, technical and financial capability” to compete effectively with the divestiture assets.

In determining whether a proposed purchaser is “fit,” the Division will evaluate the purchaser strictly on its own merits. The Division will not compare the relative fitness of multiple potential purchasers and direct a sale to the purchaser that it deems the fittest. The appropriate remedial goal is to ensure that the selected purchaser will effectively preserve competition according to the requirements in the consent decree, not that it will necessarily be the best possible competitor.

If the divestiture assets have been widely shopped and the seller commits to selling to the highest paying, competitively acceptable bidder, then the review under the incentive/intention and fitness tests may be relatively simple. Ideally, assets should be held by those who value them the most, and in general, the highest paying, competitively acceptable bidder will be the firm that can compete with the assets most effectively. On the other hand, if (a) the seller has proposed a specific purchaser, (b) the shop has been narrowly focused, or (c) the Division has any other reason to believe that the proposed purchaser may not have the incentive, intention, or resources to compete effectively, then a more rigorous review may be warranted and the Division may reject that purchaser.

The Division will use the same criteria to evaluate both strategic purchasers and purchasers that are funded by private equity or other investment firms. Indeed, in some cases a private equity purchaser may be preferred. The Federal Trade Commission’s study of merger remedies found that in some cases funding from private equity and other investment firms was important to the success of the remedy because the purchaser had flexibility in investment strategy, was committed to the divestiture, and was willing to invest more when necessary.  The study also identified cases in which a purchaser’s lack of flexibility in financing contributed significantly to the failure of the divestiture.
Private equity purchasers often partner with individuals or entities with relevant experience, which may inform the Division’s evaluation of whether the purchaser has sufficient experience to compete effectively in the market over the long term. The Division also will evaluate any links between purchasers with relevant experience and other competitors to assess whether the purchaser has any disincentive to use the divestiture assets to compete in the relevant market."

So, again, I ask you: if the DOJ approved the purchaser under all the requirements in the manual, including this one, how can sports teams attempt to hold Disney liable for the failure of Diamond to make payments, if that were to occur?  No reasonable person or court would think that would be the case.  If I'm missing something here or need to be educated, please do so.  It seems like, if anything, the sports teams would have a complaint against the government for approving the deal, not Disney for doing what the government required them to do.

 

[gotbeer]

28 minutes ago, Stradling said:

Is anyone actually reporting that they won’t be able to pay out or is this just speculation at this point?

In the article I linked, it stated that they possibly wouldn't pay but would still broadcast the games.

[Jay]

[oater]

4 hours ago, jsnpritchett said:

From the manual:

"Third, the Division will evaluate the “fitness” of the proposed purchaser to ensure that the purchaser has sufficient acumen, experience, and financial capability to compete effectively in the market over the long term. As part of this process, the Division will examine the purchaser’s financing to ensure that the purchaser can fund the acquisition, satisfy any immediate capital needs, and operate the entity over the long term. It must be demonstrated to the Division’s sole satisfaction that the purchaser has the “managerial, operational, technical and financial capability” to compete effectively with the divestiture assets.

In determining whether a proposed purchaser is “fit,” the Division will evaluate the purchaser strictly on its own merits. The Division will not compare the relative fitness of multiple potential purchasers and direct a sale to the purchaser that it deems the fittest. The appropriate remedial goal is to ensure that the selected purchaser will effectively preserve competition according to the requirements in the consent decree, not that it will necessarily be the best possible competitor.

If the divestiture assets have been widely shopped and the seller commits to selling to the highest paying, competitively acceptable bidder, then the review under the incentive/intention and fitness tests may be relatively simple. Ideally, assets should be held by those who value them the most, and in general, the highest paying, competitively acceptable bidder will be the firm that can compete with the assets most effectively. On the other hand, if (a) the seller has proposed a specific purchaser, (b) the shop has been narrowly focused, or (c) the Division has any other reason to believe that the proposed purchaser may not have the incentive, intention, or resources to compete effectively, then a more rigorous review may be warranted and the Division may reject that purchaser.

The Division will use the same criteria to evaluate both strategic purchasers and purchasers that are funded by private equity or other investment firms. Indeed, in some cases a private equity purchaser may be preferred. The Federal Trade Commission’s study of merger remedies found that in some cases funding from private equity and other investment firms was important to the success of the remedy because the purchaser had flexibility in investment strategy, was committed to the divestiture, and was willing to invest more when necessary.  The study also identified cases in which a purchaser’s lack of flexibility in financing contributed significantly to the failure of the divestiture.
Private equity purchasers often partner with individuals or entities with relevant experience, which may inform the Division’s evaluation of whether the purchaser has sufficient experience to compete effectively in the market over the long term. The Division also will evaluate any links between purchasers with relevant experience and other competitors to assess whether the purchaser has any disincentive to use the divestiture assets to compete in the relevant market."

So, again, I ask you: if the DOJ approved the purchaser under all the requirements in the manual, including this one, how can sports teams attempt to hold Disney liable for the failure of Diamond to make payments, if that were to occur?  No reasonable person or court would think that would be the case.  If I'm missing something here or need to be educated, please do so.  It seems like, if anything, the sports teams would have a complaint against the government for approving the deal, not Disney for doing what the government required them to do.

 

I repeat: Disney's liability is based on its contractual obligations.  Approval by the DOJ of a buyer is irrelevant to this principle.  

Let me know when you have any specific authority to support your position.  It is not my obligation to correct your misunderstanding of the law.

 

[jsnpritchett]

4 minutes ago, oater said:

I repeat: Disney's liability is based on its contractual obligations.  Approval by the DOJ of a buyer is irrelevant to this principle.  

Let me know when you have any specific authority to support your position.  It is not my obligation to correct your misunderstanding of the law.

 

I'm asking politely for you to educate me (and presumably others who are reading this thread) as to why DOJ approval of a buyer is irrelevant in a case like this.  If it's irrelevant, why is it ever needed?

I'm honestly not trying to be difficult here: if I'm missing something, I want to learn.  I haven't read anyone else making the argument you're making, nor has anyone I've talked to professionally mentioned this as a possibility. You mentioned "general contract principles," but do you know the specifics of this contract? 

Truly not trying to be a jerk here.  I know quite a bit about these types of deals, but I'm always open to learning something I'm missing. 

[jsnpritchett]

46 minutes ago, oater said:

I repeat: Disney's liability is based on its contractual obligations.  Approval by the DOJ of a buyer is irrelevant to this principle.  

Let me know when you have any specific authority to support your position.  It is not my obligation to correct your misunderstanding of the law.

 

 

33 minutes ago, jsnpritchett said:

I'm asking politely for you to educate me (and presumably others who are reading this thread) as to why DOJ approval of a buyer is irrelevant in a case like this.  If it's irrelevant, why is it ever needed?

I'm honestly not trying to be difficult here: if I'm missing something, I want to learn.  I haven't read anyone else making the argument you're making, nor has anyone I've talked to professionally mentioned this as a possibility. You mentioned "general contract principles," but do you know the specifics of this contract? 

Truly not trying to be a jerk here.  I know quite a bit about these types of deals, but I'm always open to learning something I'm missing. 

I actually found the sale document:

https://contracts.justia.com/companies/sinclair-broadcast-group-inc-7707/contract/104111/

Take a look at Section 6.07 and see if that lines up with what you've been saying or more of what I've been saying.

Also, I'm wondering if Section 6.09 means that Moreno did, in fact, get rid of his ownership stake in what is now Bally Sports West during this transition. "So Cal Media Holdings LLC" is owned by the Moreno family and that Section seems to say that the new entity has to buy all of their membership interest in Fox Sports West/Bally Sports West.

 

 

[Revad]

3 hours ago, jsnpritchett said:

(and presumably others who are reading this thread)

This is a classic thread, but I learn something on AW every day.  

[oater]

13 hours ago, jsnpritchett said:

 

I actually found the sale document:

https://contracts.justia.com/companies/sinclair-broadcast-group-inc-7707/contract/104111/

Take a look at Section 6.07 and see if that lines up with what you've been saying or more of what I've been saying.

Also, I'm wondering if Section 6.09 means that Moreno did, in fact, get rid of his ownership stake in what is now Bally Sports West during this transition. "So Cal Media Holdings LLC" is owned by the Moreno family and that Section seems to say that the new entity has to buy all of their membership interest in Fox Sports West/Bally Sports West.

 

 

Thanks for providing the contract—it makes an interesting read.

 

The contract makes reference to a number of other documents which are likely material to the Angels/Fox contract.  This includes a “Disclosure Letter” which may contain disclosures about the Angels contract, and an “Assignment and Assumption Agreement” which may be the contract that transferred the Angels contract.  

 

Regardless, it is pertinent to note the following:

·      Disney is identified as the “Seller.”  Preamble.

·      Disney warrants that it has the authority to enter into the agreement and complete the transactions contemplated under the agreement.  Section 3.02.

·      Disney makes a number of warranties to the effect that it is in material compliance of applicable laws, licenses and “Material Contracts” that pertain to the transferred business.  Sections 3.07 and 3.08.

 

Unless excluded under the Disclosure Letter or other referenced documents, Disney is acknowledging that it was the owner of the Angels/Fox contract and had the authority to transfer title to Diamond.  Since Disney was a party to the Angels/Fox contract, it had the obligation to perform the contract in full, and means that unless the Angels in some manner agreed to release Disney, the Angels have recourse against Disney for any breach of the contract.  Again, this is under applicable general contract law.

 

With regard to your question about Section 6.07 under which Diamond agrees to perform the assigned contracts, this is a standard contract provision for any agreement to transfer an executory contract.  Nobody is disputing Diamond’s obligation to perform—rather the question is that if Diamond fails to perform, what recourse do the contracting parties have against other parties, such as Disney.

 

Under Section 7.07, Diamond agrees to indemnify Disney for any liability Disney incurs as a result of the operation of the transferred business by Diamond.  While this is a standard provision in a contract of this type, it reinforces the concept that Disney may have liability because of a breach of a transferred contract by Diamond.  

 

Disney also obtained a guarantee by Sinclair Group of certain payment obligations of Diamond under the agreement.  Section 4.08.  I can’t tell whether this includes any of Diamond’s indemnification obligations (Section 7.07), but it demonstrates that Disney had some concern about Diamond’s financial stability.  

 

I agree with your presumption that Moreno apparently exercised a put option to divest his interest in FSN West.  Section 6.09(b).  This is another indicator that Moreno was never convinced about the profitability of the restructured Diamond business model (and would be another reason Moreno would not release Disney from liability under the Angels/Fox contract).

 

To clarify my point about any approval of the buyer by DOJ not altering any obligations of Disney under general contract law, please keep in mind that DOJ’s interest is to ensure compliance with antitrust laws.  DOJ has an interest in trying to insure that the transferred business will operate successfully in order to preserve competition in the marketplace.  This is obviously not a perfect process, as many transferred businesses fail notwithstanding DOJ approval.  The main point is that there is no DOJ policy to relieve a selling party from liability under its contracts.

 

Also, keep in mind that only the provisions in the DOJ/Disney consent decree have any meaning or binding effect.  And since the Angels were not a party to that proceeding, they are not bound by the consent decree.

 

Finally, even if the DOJ were interested in relieving Disney from contract liability, such action would potentially expose the government to liability for a taking of property without compensation.  Obviously, I don’t believe this to be factually relevant, but it is another policy reason why the DOJ would not try to alter contract rights as part of a divestiture decree.