Warner Bros. Discovery is looking to get out of the regional sports networks business.

The media and entertainment giant, which also owns Turner Sports, sent a letter to the sports teams whose games it carries that it does not have the cash to pay upcoming rights fees, and that WBD will not fund the shortfall. The company proposes to hand control of the RSNs over to the teams and leagues, and warns that if it can’t execute on a transfer, Chapter 7 bankruptcy is on the table.

“We find ourselves running out of time and options,” the letter said. 

The Wall Street Journal first reported the details of the letter.

That being said, a league source told The Hollywood Reporter that “we have been having productive conversations with WB Discovery about the future of their four RSNs,” suggesting that a deal may be possible.

The company owns three RSNs, branded AT&T SportsNet (a holdover from the telecom giant’s ownership days), serve Colorado, Utah, Houston and Pittsburgh, and carry rights to NBA teams like the Houston Rockets and Utah Jazz, MLB’s Colorado Rockies, Pittsburgh Pirates and Houston Astros, and the NHL’s Pittsburgh Penguins.

Regional sports networks have clearly hit a tipping point in their business models. The largest RSN owner, Diamond Sports, is also said to be on the verge of bankruptcy, and skipped a debt payment to bondholders earlier this month.

Unlike national sports divisions like Fox Sports, ESPN or Turner Sports, the regional nature of RSNs means that they have limited scale, and while for years they had pricing power in their markets, cord-cutting has diluted whatever gains there are to be had.

Among major media companies, NBCUniversal also owns a handful of RSNs. Both Fox and Disney exited the space in conjunction with their merger, selling their combined RSN footprint to Sinclair, which created Diamond Sports.