Sinclair Accused of Draining $1.5 Billion From Local Sports Unit
- Sinclair subsidiary claims it had to pay high management fees
- Broadcaster says it struggled soon after Sinclair deal closed
The Sinclair Broadcast Group headquarters in Hunt Valley, Maryland.
Photographer: Win McNamee/Getty ImagesSinclair Broadcast Group Inc. is accused of wrongly siphoning more than $1.5 billion from a subsidiary operating a network of local sports channels that filed bankruptcy earlier this year, according to a lawsuit made public Wednesday.
The subsidiary, Diamond Sports Group, claims in a lawsuit against Sinclair that its parent company extracted substantial sums from the broadcaster after acquiring the business from The Walt Disney Company in 2019 in a deal valued at $10.6 billion. Sinclair continued siphoning assets as Diamond’s business deteriorated while losing customers and major distribution partners including DISH Network LLC, according to the lawsuit.