REDEEMABLE NONCONTROLLING INTERESTS

3 Months Ended

Mar. 31, 2020

Temporary Equity Disclosure [Abstract]

REDEEMABLE NONCONTROLLING INTERESTS

REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company. Our redeemable non-controlling interests consist of the following:

Redeemable Subsidiary Preferred Equity. On August 23, 2019, Diamond Sports Holdings LLC (DSH), an indirect parent of DSG and indirect wholly-owned subsidiary of the Company, issued preferred equity (the Redeemable Subsidiary Preferred Equity).

On January 21, 2020, we redeemed 200,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates.

The balance of the Redeemable Subsidiary Preferred Equity as of March 31, 2020 was $522 million, net of issuance costs. Dividends accrued during the three months ended March 31, 2020 were $13 million which was paid-in-kind and included in the outstanding balance as of March 31, 2020. The dividends paid-in-kind accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 8%, which is 0.5% higher than the rate payable if the dividends were paid in cash during the quarter.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our subsidiaries had the right to sell their interest to the Company at a fair market sale value of $376 million, plus any undistributed income, which was exercised and settled in January 2020.