JPMorgan Chase & Co. was accused of helping Sinclair Broadcast Group raid its own local sports television unit for $929 million when that affiliate, Diamond Sports Group, was likely insolvent, according to a lawsuit made public on Monday, Bloomberg News reported. Diamond accused JPMorgan of working with Sinclair — Diamond’s parent company — to extract the cash from the sports broadcasting business as it was headed toward chapter 11 with billions of dollars in debt, according to the complaint in Texas bankruptcy court. Diamond has separately accused Sinclair of wrongly draining $1.5 billion from the business, an allegation the parent company denies. Specifically, Diamond alleges JPMorgan advised Sinclair to funnel roughly $929 million out of the sports broadcaster in order to repay preferred equity held by a JPMorgan affiliate. That was despite JPMorgan being “well aware” of significant challenges facing the company’s network of regional sports channels at the time Sinclair acquired the business from The Walt Disney Company in August 2019 in a deal valued at $10.6 billion, according to the lawsuit.
