FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of carrying value and fair value of notes and debentures

The following table sets forth the carrying value and fair value of our financial assets and liabilities for the periods presented (in millions):


	As of March 31, 2022				As of December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
Investments in equity securities	$	6	$	6	$	5	$	5
STG:
Money market funds	400		400		265		265
Deferred compensation assets	46		46		48		48
Deferred compensation liabilities	36		36		38		38
DSG (a):
Money market funds	—		—		101		101

Level 2:
Investments in equity securities (b)	92		92		114		114
STG (c):
5.875% Senior Notes due 2026 (d)	348		339		348		357
5.500% Senior Notes due 2030	500		435		500		489
5.125% Senior Notes due 2027	400		365		400		391
4.125% Senior Secured Notes due 2030	750		670		750		712
Term Loan B (d)	379		373		379		373
Term Loan B-2	1,268		1,229		1,271		1,239
Term Loan B-3	734		717		736		722

DSG (a) (c):
12.750% Senior Secured Notes due 2026	—		—		31		17
6.625% Senior Unsecured Notes due 2027	—		—		1,744		490
5.375% Senior Secured Notes due 2026	—		—		3,050		1,525
Term Loan	—		—		3,226		1,484
Debt of variable interest entities (c)	9		9		9		9
Debt of non-media subsidiaries (c)	17		17		17		17

Level 3
Investments in equity securities (e)	226		226		282		282

(a)The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from the Company's balance sheet as part of the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

(b)Consists of unrestricted warrants to acquire marketable common equity securities. The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.

(c)Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $44 million and $158 million as of March 31, 2022 and December 31, 2021, respectively.

(d)In April 2022, the Term Loan B was refinanced and the 5.875% Senior Notes due 2026 were redeemed. See Note 13. Subsequent Events.

(e)On November 18, 2020, we entered into a commercial agreement with Bally's Corporation ("Bally's") and received warrants and options to acquire common equity in the business. During the three months ended March 31, 2022 and 2021 we recorded a fair value adjustment loss of $56 million and a fair value adjustment gain of $103 million, respectively, related to these interests. The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity adjusted for a 16% discount for lack of marketability ("DLOM") as of March 31, 2022 and December 31, 2021, respectively. The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock, the exercise price of the options, which range from $30 to $45 per share, and a DLOM of 16% as of March 31, 2022 and December 31, 2021, respectively. There are certain restrictions surrounding the sale and ownership of common stock and the Company has agreed not to sell any shares beneficially owned prior to the first anniversary of the agreement. The Company is also precluded from owning more than 4.9% of the outstanding common shares of Bally's, inclusive of shares obtained through the exercise of the warrants and options described above.

Schedule of changes in Level 3 financial liabilities measured on recurring basis

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three months ended March 31, 2022 and 2021 (in millions):









	Options and Warrants
Fair value at December 31, 2021	$	282


Measurement adjustments	(56)
Fair value at March 31, 2022	$	226









	Options and Warrants
Fair value at December 31, 2020	$	332


Measurement adjustments	103
Fair value at March 31, 2021	$	435