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NOTES PAYABLE AND COMMERCIAL BANK FINANCING
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
NOTES PAYABLE AND COMMERCIAL BANK FINANCING 7. NOTES PAYABLE AND COMMERCIAL BANK FINANCING:
 
Notes payable, finance leases, and commercial bank financing (including "finance leases to affiliates") consisted of the following as of December 31, 2022 and 2021 (in millions):
 20222021
STG Bank Credit Agreement:
Term Loan B-1, due January 3, 2024 (a)$— $379 
Term Loan B-2, due September 30, 2026 1,258 1,271 
Term Loan B-3, due April 1, 2028729 736 
Term Loan B-4, due April 21, 2029 (a)746 — 
DSG Bank Credit Agreement (b):
Term Loan, due August 24, 2026 — 3,226 
STG Notes:
5.875% Unsecured Notes, due March 15, 2026 (a)
— 348 
5.125% Unsecured Notes, due February 15, 2027 (c)
282 400 
5.500% Unsecured Notes, due March 1, 2030
500 500 
4.125% Senior Secured Notes, due December 1, 2030
750 750 
DSG Notes (b):
12.750% Senior Secured Notes, due December 1, 2026
— 31 
5.375% Senior Secured Notes, due August 15, 2026
— 3,050 
6.625% Unsecured Notes, due August 15, 2027
— 1,744 
Debt of variable interest entities8 9 
Debt of non-media subsidiaries16 17 
Finance leases23 28 
Finance leases - affiliate9 9 
Total outstanding principal4,321 12,498 
Less: Deferred financing costs and discounts(56)(158)
Less: Current portion(35)(66)
Less: Finance leases - affiliate, current portion(3)(3)
Net carrying value of long-term debt$4,227 $12,271 
 
(a)In April 2022, STG raised Term B-4 Loans in an aggregate principal amount of $750 million, the proceeds of which were used to refinance all of STG’s outstanding Term Loan B-1 due January 2024 and to redeem STG’s outstanding 5.875% senior notes due 2026. See STG Bank Credit Agreement below.
(b)The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from our 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.
(c)During the year ended December 31, 2022, we purchased $118 million aggregate principal amount of the STG 5.125% Notes in open market transactions for consideration of $104 million. The STG 5.125% Notes acquired during the year ended December 31, 2022 were canceled immediately following their acquisition. See STG Notes below.
Debt under the STG Bank Credit Agreement, notes payable, and finance leases as of December 31, 2022 matures as follows (in millions):
 
 Notes and 
Bank Credit Agreement		Finance LeasesTotal
2023$31 $9 $40 
202429 7 36 
202543 7 50 
20261,234 7 1,241 
2027299 4 303 
2028 and thereafter2,653 6 2,659 
Total minimum payments4,289 40 4,329 
Less: Deferred financing costs and discounts(56)— (56)
Less: Amount representing future interest— (8)(8)
Net carrying value of debt$4,233 $32 $4,265 

Interest expense in our consolidated statements of operations was $296 million, $618 million, and $656 million for the years ended December 31, 2022, 2021, and 2020, respectively. Interest expense included amortization of deferred financing costs, debt discounts, and premiums of $12 million, $30 million, and $31 million for the years ended December 31, 2022, 2021, and 2020, respectively.
The stated and weighted average effective interest rates on the above obligations are as follows, for the years ended December 31, 2022 and 2021:
Weighted Average Effective Rate
Stated Rate20222021
STG Bank Credit Agreement:
Term Loan B-1 (a)
LIBOR plus 2.25%
—%2.36%
Term Loan B-2 (d)
LIBOR plus 2.50%
4.62%2.77%
Term Loan B-3 (d)
LIBOR plus 3.00%
4.88%3.89%
Term Loan B-4 (a) (e)
SOFR plus 3.75%
8.21%—%
Revolving Credit Facility (b) (e)
SOFR plus 2.00%
—%—%
DSG Bank Credit Agreement (c):
Term Loan
LIBOR plus 3.25%
—%3.62%
STG Notes:
5.875% Unsecured Notes (a)
5.88%—%6.09%
5.125% Unsecured Notes
5.13%5.33%5.33%
5.500% Unsecured Notes
5.50%5.66%5.66%
4.125% Secured Notes
4.13%4.31%4.31%
DSG Notes (c):
12.750% Secured Notes
12.75%—%11.95%
5.375% Secured Notes
5.38%—%5.73%
6.625% Unsecured Notes
6.63%—%7.00%
(a)In April 2022, STG raised Term B-4 Loans in an aggregate principal amount of $750 million, the proceeds of which were used to refinance all of STG’s outstanding Term Loan B-1 due January 2024 and to redeem STG’s outstanding 5.875% senior notes due 2026. See STG Bank Credit Agreement below.
(b)We incur a commitment fee on undrawn capacity of 0.25%, 0.375%, or 0.50% if our first lien indebtedness ratio is less than or equal to 2.75x, less than or equal to 3.0x but greater than 2.75x, or greater than 3.0x, respectively. The STG Revolving Credit Facility is priced at LIBOR plus 2.00%, subject to decrease if the specified first lien leverage ratio (as defined in the STG Bank Credit Agreement) is less than or equal to certain levels. As of December 31, 2022 and 2021, there were no outstanding borrowings, $1 million in letters of credit outstanding, and $649 million available under the STG Revolving Credit Facility. See STG Bank Credit Agreement below for further information.
(c)The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from our 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.
(d)The STG Term Loan B-2 will convert to using the Secured Overnight Financing Rate ("SOFR") upon the complete phase-out of LIBOR on June 30, 2023 and will be subject to customary credit spread adjustments set at the time of the rate conversion. The STG Term Loan B-3 has LIBOR to SOFR conversion terms, including the applicable credit spread adjustments, built into the existing agreement.
(e)Interest rate terms on the STG Term Loan B-4 and revolving credit facility include additional customary credit spread adjustments.

We recorded a $23 million original issuance discount during the year ended December 31, 2022, $4 million of debt issuance costs during the year ended December 31, 2021, and $19 million of debt issuance costs and a $25 million original issuance premium during the year ended December 31, 2020. Debt issuance costs and original issuance discounts and premiums are presented as a direct deduction from, or addition to, the carrying amount of an associated debt liability, except for debt issuance costs related to our STG Revolving Credit Facility and DSG Revolving Credit Facility (prior to the Deconsolidation), which are presented within other assets in our consolidated balance sheets.
STG Bank Credit Agreement

We have a syndicated credit facility which includes both revolving credit and issued term loans (the "STG Bank Credit Agreement").

The STG Bank Credit Agreement includes a financial maintenance covenant, the first lien leverage ratio (as defined in the "STG Bank Credit Agreement"), which requires the ratio not to exceed 4.5x, measured as of the end of each fiscal quarter. As of December 31, 2022, the STG first lien leverage ratio was below 4.5x. The financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the STG Revolving Credit Facility, measured as of the last day of each quarter, is utilized under the STG Revolving Credit Facility as of such date. Since there was no utilization under the STG Revolving Credit Facility as of December 31, 2022, STG was not subject to the financial maintenance covenant under the STG Bank Credit Agreement. The STG Bank Credit Agreement contains other restrictions and covenants which we were in compliance with as of December 31, 2022.

On December 4, 2020, we entered into an amendment to the STG Bank Credit Agreement to extend the maturity date of the STG Revolving Credit Facility to December 4, 2025.

On April 1, 2021, STG amended the STG Bank Credit Agreement to raise additional term loans in an aggregate principal amount of $740 million ("STG Term Loan B-3"), with an original issuance discount of $4 million, the proceeds of which were used to refinance a portion of the STG Term Loan B-1 maturing in January 2024. The STG Term Loan B-3 matures in April 2028 and bears interest at LIBOR (or "successor rate") plus 3.00%.

On April 21, 2022, STG entered into the Fourth Amendment (the "Fourth Amendment") to the STG Bank Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto (the "Guarantors") and the lenders and other parties thereto.

Pursuant to the Fourth Amendment, STG raised Term B-4 Loans (as defined in the STG Bank Credit Agreement) in an aggregate principal amount of $750 million, which mature on April 21, 2029 (the "STG Term Loan B-4"). The STG Term Loan B-4 was issued at 97% of par and bears interest, at STG’s option, at Term SOFR plus 3.75% (subject to customary credit spread adjustments) or base rate plus 2.75%. The proceeds from the Term Loan B-4 were used to refinance all of STG’s outstanding STG Term Loan B-1 due January 2024 and to redeem STG’s outstanding 5.875% senior notes due 2026 (the "STG 5.875% Notes"). In addition, the maturity of $612.5 million of the total $650 million of revolving commitments under the STG Bank Credit Agreement were extended to April 21, 2027, with the remaining $37.5 million continuing to mature on December 4, 2025. For the year ended December 31, 2022, we capitalized an original issuance discount of $23 million associated with the issuance of the STG Term Loan B-4, which is reflected as a reduction to the outstanding debt balance and will be recognized as interest expense over the term of the outstanding debt utilizing the effective interest method. We recognized a loss on extinguishment of $10 million for the year ended December 31, 2022.

The STG Term Loan B-2, STG Term Loan B-3, and STG Term Loan B-4 amortize in equal quarterly installments in an aggregate amount equal to 1% of the original amount of such term loan, with the balance being payable on the maturity date.

STG Notes

On December 4, 2020, we issued $750 million aggregate principal amount of senior secured notes, which bear interest at a rate of 4.125% per annum and mature on December 1, 2030 ("the STG 4.125% Secured Notes"). The net proceeds of the STG 4.125% Secured Notes were used, plus cash on hand, to redeem $550 million aggregate principal amount of STG's 5.625% senior unsecured notes due 2024 ("the STG 5.625% Notes") for a redemption price, including the outstanding principal amount of the STG 5.625% Notes, accrued and unpaid interest, and a call premium, of $571 million and to prepay $200 million outstanding under the STG Term Loan B-1. We recognized a loss on extinguishment of the STG 5.625% Notes and prepayment of the STG Term Loan B-1 of $15 million for the year ended December 31, 2020.
Prior to December 1, 2025, we may redeem the STG 4.125% Secured Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the STG 4.125% Secured Notes plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium. In addition, on or prior to December 1, 2023, we may redeem up to 40% of the STG 4.125% Secured Notes using the proceeds of certain equity offerings. Beginning on December 1, 2025, we may redeem some or all of the STG 4.125% Secured Notes at any time or from time to time at certain redemption prices, plus accrued and unpaid interest, if any, to the date of redemption. If the notes are redeemed during the twelve-month period beginning December 1, 2025, 2026, 2027, and 2028 and thereafter, then the redemption prices for the STG 4.125% Secured Notes are 102.063%, 101.375%, 100.688%, and 100%, respectively. Upon the sale of certain of STG’s assets or certain changes of control, we may be required to repurchase some or all of the STG 4.125% Secured Notes.
 
STG’s obligations under the STG 4.125% Secured Notes are secured on a first-lien basis by substantially all tangible and intangible personal property of STG and each wholly-owned subsidiary of STG or the Company that guarantees the STG Bank Credit Agreement ("the Guarantors") and on a pari passu basis with all of STG's and the Guarantor's existing and future debt that is secured by a first-priority lien on the collateral securing the STG 4.125% Secured Notes, including the debt under the STG Bank Credit Agreement, subject to permitted liens and certain other exceptions.

During the year ended December 31, 2022, we purchased $118 million aggregate principal amount of STG's 5.125% senior notes due 2027 (the "STG 5.125% Notes") in open market transactions for consideration of $104 million. The STG 5.125% Notes acquired during the year ended December 31, 2022 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the STG 5.125% Notes of $13 million for the year ended December 31, 2022.

Upon issuance, the STG 5.125% Notes were redeemable up to 35%. We may redeem 100% of the notes upon the date set forth in the indenture of the notes. The price at which we may redeem the notes is set forth in the indenture of the notes. Also, if we sell certain of our assets or experience specific kinds of changes of control, the holders of these notes may require us to repurchase some or all of the outstanding notes.

DSG Bank Credit Agreement and Notes

The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from our 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.

Debt of variable interest entities and guarantees of third-party obligations

We jointly, severally, unconditionally, and irrevocably guaranteed $2 million and $39 million of debt of certain third parties as of December 31, 2022 and 2021, respectively, of which $2 million and $9 million, net of deferred financing costs, related to consolidated VIEs is included in our consolidated balance sheets as of December 31, 2022 and 2021, respectively. We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $112 million with annual escalations of 4% for the next seven years. As of December 31, 2022, we have determined that it is not probable that we would have to perform under any of these guarantees.

Finance leases

For more information related to our finance leases and affiliate finance leases see Note 8. Leases and Note 15. Related Person Transactions, respectively.