REDEEMABLE NONCONTROLLING INTERESTS

6 Months Ended

Jun. 30, 2021

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).

Dividends accrued during the three and six months ended June 30, 2021 were $4 million and $8 million, respectively, and during the three and six months ended June 30, 2020 were $11 million and $24 million, respectively, and are reflected in net income attributable to the noncontrolling interests in our consolidated statements of operations. The dividends paid in cash accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 7.5%, which is 0.5% lower than the rate payable if the dividends were paid-in-kind during the quarter. Dividends accrued during the three months ended June 30, 2021 were paid-in-kind and added to the liquidation preference. Dividends accrued during the three months ended March 31, 2021 were paid in cash in March 2021.

The balance of the Redeemable Subsidiary Preferred Equity was $174 million and $170 million, net of issuance costs, as of June 30, 2021 and December 31, 2020.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our subsidiaries has the right to sell their interest to the Company at any time during the 30-day period following September 30, 2025. The value of this redeemable noncontrolling interest was $15 million and $20 million as of June 30, 2021 and December 31, 2020, respectively.