Diamond Sports Group, the corporation which owns the Bally Sports regional sports networks, officially filed for Chapter 11 bankruptcy in the Southern District of Texas this afternoon. The company announced the news in a press release.
Josh Kosman of the New York Post reported yesterday that Diamond was planning to file for bankruptcy. That was expected to officially occur on Friday, but the process has evidently been accelerated a few days.
“The DSG Board of Managers has been evaluating strategic opportunities with the support of its advisors and in coordination with creditors to position the Company for long term success and has determined that the best path forward for the Company and its stakeholders is to restructure through a Chapter 11 process,” said CEO David Preschlack. “We are utilizing this process to reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt.”
The most notable development for fans of teams whose local broadcasting deals are carried through Bally is that the company confirmed the RSN “will continue to operate in the ordinary course during the Chapter 11 process.” The corporation added it has approximately $425MM in cash to fund the business during its restructure.
Diamond is responsible for local broadcasts for 14 major league teams*. Kosman reported yesterday that Diamond would try to restructure its deals with some of the clubs but was planning to entirely reject its contracts with the Diamondbacks, Padres, Guardians and Reds. (Diamond didn’t provide any specifics on its planned course of action in today’s release.)
According to the Post, MLB is planning to step up for teams whose contracts are abandoned and stream them in-market for free while the league searches for alternatives. There’ll surely be more developments over the coming weeks and months, but the long-anticipated bankruptcy for the fledgling RSN corporation has officially been set in motion.
* The Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins are all broadcast by Bally.
Half the league’s fans: we get to stream for free!
The other half; we have to pay at least $70 a month just to get root sports!
Round and round we go on the crazy wheel
Root Sports is only the Mariners, right? The Mariners own 100% of the station that broadcasts their games and the broadcast rights would revert to them if payments are not made by WBD.
Root is 40% owned by ATT, 60% by the Mariners.
Warner Brothers Discovery owns 40% of Root Sports. The rest is owned by the Mariners.
Are you saying they own a 100%? I read they own maybe 70%
ATT is also associated with many teams including the Rockies, etc.
Around and around we go…
In nurse follars
Yet another example of why the NFL is the best run sports business in the history of the world.
Do you want MLB to have a rotating crew of announcers for every game like the NFL?
In nurse follars
I can envision a scenario where mlb streams the broadcasts from the other team with local broadcasters sitting in a studio calling play by play just like during the pandemic. So you’d see the Yankees broadcast but with local in studio announcers. They wouldn’t need three guys and would cut costs by going with the play by play guy and the color guy. Much less cost.
Yep, I can see this, too. Travel costs drop immensely but the broadcasters will be dependent on the quality of the video feed. They’ll miss some of the action.
Manfred has already said that will not happen and that affected teams will maintain their same broadcast teams.
The announcers not traveling with the when your talking million$$$$$$.Doesn’t move the needle. They fly with the team. They get a block of rooms at the hotel. Some if the rooms go unused, so what’s 3 more bodies?
60 million for the reds, 100K for each announcer (just guessing).
Very little overall.
the problem was a very very bad business model .
Make Sinclar responsible.
Dread Pirate Roberts
Apples and oranges, they are not comparable.
In nurse follars
MLB is a circular firing squad. NFL is a well oiled machine. If that’s apples and oranges, fine.
Dread Pirate Roberts
162 games vs 17 games
Have you been paying attention to the NFL for the past five years or so? Many of us no longer watch, and have zero interest in that woke mess.
Let’s not the woke commercials. And the woke Super Bowl half time shows.
Can’t watch the National Wokeball League after Colin Kaepernick dropped to a knee and dropped a Marxist dookie on the troops.
I won’t let that #woke #snowflake sport tread on me! Anyone who challenges the status quo or points out that not all bootstraps are created equal hurts my feelings!
It’s We the People, not We the SHEEPLE! *revs F250 and buries empathy*
Right guys…. MLB is so far removed from woke BS that they played their all-star game in Atlanta and didn’t move it out of Georgia…. er… wait a minute….
@cainer18 I hate to be that guy, but you actually need to rev an F350 dually. It must have a Calvin pissing on a Chevy logo, with an “I’d rather be strokin’ than cummin” vinyl. You need to grow a patchy beard to hide your double-chin and make sure you remind anyone in earshot that you had a chance to play college ball if you didn’t blow your knee out (and if you had any hand eye coordination, but that’s not important).
The NFL has become a predictable joke. No contrasting styles anymore because of rule changes. Certain rules that leave the integrity of the game at risk. Like spotters sitting in the stand and determining a player wobbled or something and kicking them out. We Know which four teams will compete for a championship by week 4
LOL, the NFL plays like 4 games a year, supports no minor league, spends zero dollars internationally, doesn’t guarantee player contracts and the NFLPA is a total pushover. So yeah I guess you are right, the NFL owners get paid for sure.
MLB needs to just take over the broadcasts exclusively to MLB.TV, enough playing around with middle men already.
The people want the content, MLB makes the content.
Why are these networks, cable companies and other streaming services still getting a cut?
Over 50% of households still rely on cable or satellite for their TV viewing. When you get to the 50+ year old demographic that makes up 35% of the MLB audience, the percentage that are not using strictly a streaming service is even higher. MLB is not stupid enough to cut out that huge chunk of viewers just to broadcast only on MLB.TV
What they are doing instead is starting discussions with the majors carriers like DIRECTV, DISH, NBC/Comcast, Cox, etc… about baseball only channels in the markets that are going to be affected by the Diamond Sports and WBD Chapter 11 filings.
You may be forced to use MLB.TV in the short term, but soon all your normal carriers will have your local team broadcast there. Just without the blackout restrictions.
Yes we will.
No are not talking like 25 years ago.
While I am in low 60;s, I do not know anyone who does not have the ability to stream.
A whole lot cheaper then cable (Just way for the internet).
If they want to see the team play, they will stream.
Because they’re providers? Not that hard to figure 99
You make much more $ having games on cable. Majority of people with cable aren’t watching mlb but still paying them $. Only getting paid from actual baseball fans is a big blow. Not all fans will will willing go to streaming.
Not all, a majority of them.
And while you are collecting $3 a subscriber from the cable company he is collecting all the ad revenue. Which if you put all the games on MLB.TV guess what? MLB keeps all the subscriber dollars AND the ad revenues.
The cable companies and networks are paying MLB with ad revenue and subscriber $$$ while trying to keep a profit for themselves. Once you understand that you can come to grips with the reality that their can never be more money for MLB under this system.
All of this of course is not even mentioning the fact that a record number of people don’t watch from a sofa on a fixed TV anymore. Cable completely screws you from an exposure standpoint with those people.
How is a business that covers up then downplays traumatic brain injuries the best run sports business? A league that treats players like they are disposable is run well?
You sound like you enjoy the taste of boot.
Ol’ Uncle Charlie
Plus, a league which stripped the Rams from its very viable fan base and got caught doing it? The Rams sold 88% of their stadium tickets in their final season, despite Kroenke being ALLOWED AND ENCOURAGED BY THE LEAGUE OWNERSHIP AND LEADERS to tank the team, play WAY under the cap, lie about a stadium renovation deal and move the team! The league is a disgrace.
T-Mobile gives MLB TV to its customers for free. March 28th is the first day to claim a full 2023 MLB TV subscription of all the teams.
God bless T-Mobile
Praise jeebus for TMobile and a VPN
What a complete joke. What happens to the people who now have to pay for Bally+ just to view games that are happening miles from where we live? What’s keeping Bally from ceasing the RSNs in May? What person pays a company that’s admittedly going bankrupt?
MLB needs to just overtake all of Bally’s networks and give us fans some clarity on how we’ll be able to watch our team come March 30. That’d restore some equity to the matter, too.
I’d rather just get mlb tv and every game for all or most the season for $75 or whatever.
Not sure what will happen, but out of market is 85 per year, if you are a vet.
I think it is 125 without it.
Things have to change for local for Bally or AT&T sportsnet.
$130 for a single team unless you have Tmobile
It looks like $149 for all teams or $129 for 1 team
$75 to $100 for all teams. Little less for single team. VPN pre paid credit card watch in market games.
Just get mlb.tv. Way better and can see all games or just your teams plus extra material.
As long as you don’t want to watch your team because MLB.tv is just for out of market games right now.
Long Suffering Guardians Fan
MLB needs to step up. I live out of market and damned well better be able to watch the Guards.
You will continue to suffer. Enjoy.
You mean Indians.
No, he very clearly said guardians you dork
Sounds like we have hurt the wokies feelings!
Aw you’re just upset that there’s no team named after dead cops or military.
That’s what the team is named you idiot. Like it or not, facts aren’t “woke”.
INJUNS, there I fixed it for you.
go back to Telegram and take your Ivermectin
Whaaaaa sniff sniff
Here is where you will find Indians.
Conservatives: why must everything be about politics?
And what do you do? Start some petty argument completely unsolicited.
But since you brought up politics, Missouri is worthless. Thanks for playing.
Haha, libs live for politics. It’s their reason for existence
I’m ready for Tee Pee talk with Harry Doyle.
If Diamond Sports defaults on its payments to the teams, MLB already has in place the ability and personnel to broadcast those games. You will have to stream it through MLB.TV at first, but if Manfred can be believed you will be able to by an a la carte package that just includes 1 team instead of all teams.
MLB.TV has had the single team option for awhile. Would be easy to
include these teams once the blackout rules are lifted.
One thing to consider is you can get the package for all teams (minus local) for less than following just one team. $130 for a single team and you can get the other package for $100.
MLB.TV has had single team options? I am a Tmobile customer so don’t pay for it directly. I have never looked to see if a single team package was available. That must be just for out-of-market teams.
They’ve been doing it for quite a few years now. At least 6 or 7.
Yes, only for out of market teams.
20 bucks less than getting the whole package. If you go through the alumni and get the 50% code then you can watch all the games for cheaper than watching just one team.
That is great. So many people want to see their team from back home and can’t on local TV. I think for $20 bucks I would just get the whole package, but I am sure some people just care about their team.
In Russia I can watch all the games and not worry about blackouts.
So can I….. It’s called use a VPN
MLB.tv is not based on only physical location. It’s based on the billing address for the credit card you used to sign up for the service plus the location of your IP address. Both are blacked out of local games.
Hired Gun 23
Someone will spend some coin to take over…give it time.
In nurse follars
Did you miss the part about canceling contracts for teams where expenses are higher than revenues? No one will take over a loss without a huge increase in subscription fees. MLB will be forced to subsidize and unaffected teams will object.
Braaack. Wrong answer. But thanks for playing.
Go listen to Manfred’s comments about this subject at the Winter Meetings in San Diego.
In nurse follars
From the article: but was planning to entirely reject its contracts with the Diamondbacks, Padres, Guardians and Reds. (Diamond didn’t provide any specifics on its planned course of action in today’s release.). An 11 reorganization allows the termination of contracts (think store closures for example) to allow the party to come out of the plan smaller, with less debt and with only the best assets. That’s what the article says diamond will do.
Nope. It says they were “planning” on doing that. Its too late for that now. Once you file Chapter 11, you no longer make any business decision for your company. Only the bankruptcy judge can do that now.
What Diamond Sports sells is advertising on channels that broadcast sports teams. No judge is going to allow them to terminate contracts for broadcasting rights for those sports teams. That is 100% of their revenue generation. The judge will choose to terminate leases, renegotiate loans, renegotiate debts to vendors, and anything other than the broadcasting rights. Because without those broadcasting rights they don’t have a company to repay the rest of their debts.
I don’t really care what some sports writer says about bankruptcy unless its his personal filing. I will listen to legal experts. None of them are saying what Kosman wrote in his article.
Pads fans – all due respect, BUT you’re clueless about how Ch11 works.
Under a ch11 filing, the debtor almost always has a right to submit its own reorganization plan which the affected creditors have a right to then vote upon, and, them the court gets to approve or disapprove. Typically there are negotiations with creditors to obtain the proper number of affirming votes, and the role of the judge is to make sure everyone is treated fairly insofar as the assets of the debtor allows – not, for example, paying 13 small creditors in full and giving two largest creditors zero.
And again, most times the debtor retains the right to keep operating their own business concern, make day-to-day decisions, and can ask the court for approval to take on new debt. This is called a debtor-in-possession. It is the most common form, wherein the debtor takes on the role of being its own trustee, with powers to, you guessed it, make the decision to cut underperforming assets and abandon them.
Bankruptcy judges approve and disapprove overall plans and structures. They don’t sit there and make every single decision and run the companies themselves. They don’t have time, and, there aren’t enough of them.
You cannot legally and without penalty abandon a contract such as those for the streaming rights without being subject to penalty provisions and legal enforcement by the other party UNTIL you file bankruptcy. You need an active case to begin the process of legal abandonment of underperforming and underwater assets.
If you want to know the ins and outs of bankruptcy operation I would suggest going to law school and becoming an attorney. However, as a matter of principle and knowing how such things work, I dont recommend ANYONE go to lawschool unless you enjoy misery and have money to burn.
You are partially right. The company filing Chapter 11 is required to file a plan.
The creditors don’t necessarily get to vote on that plan. It is completely at the discretion of the Judge and depends greatly on the complexity of the filing.
The company that filed is given a set amount of money with which to continue day to day operations and cannot take on any additional debt unless approved by the bankruptcy judge.
Debtor-in-possession is practically never possible in complex chapter 11 cases.
The company that filed the chapter 11 will not be allowed to squander what is considered by the court to be the debtor’s money and even some day to day operational expenses will have to be run through the court. Read Daniel R Jones cases to get more of an idea of why.
Remember, the court starts with the assumption that you mismanaged your business so badly that they are asking the court to step in and, in essence, save their company from total insolvency. The courts responsibility is to the debtors, not the company filing Chapter 11, so they err on the side of making sure they preserve assets that can be sold to pay off those debts.
Broadcasting rights are a salable asset and in this case would be the very last thing a judge would allow to be abandoned. Sold, even if at a loss, but not abandoned.
Again, the courts responsibility is to the debtors and broadcasting rights have value even if that value is less than what the company paid for it.
I’d agree with most of that baseball. But not all of it. You’re blending the line between Ch7 and Ch11.
Normal course would be to let the creditors holding some secured interest vote, to get a straw poll as to how those parties feel about things. The more support, the more likely the court goes along with the proposal.
Broadcast rights are only a saleable asset in-so-far as they have an excess value. Any sale of the asset is subject to the secured rights of the creditor in question.
The distribution rights are more akin to a secured asset – car with auto loan, house with mortgage – than an asset of the company sign as broadcasting equip that hasn’t been pledged as collateral by some line of credit.
Anyone ‘buying’ the broadcast asset would be subject to the terms and conditions of the underlying note, in this case the rights deal. The bankruptcy court cannot, for example, say ‘hey San Diego, we sold your right to your games the next, whatever 23 years for sake of argument. We got a bid of 20m. We’re keeping that 20m to pay creditors, your chare is $50,000 a year.’
Any asset ‘abandoned’ by the business entity in their operation plan becomes an asset of the bankruptcy estate for liquidation. If nobody can pay to assume it, and, I presume there’s assignments consent language in any broadcast rights deal anyways, the asset is disposed of as applicable – in most cases given over to the secured interest, who then handles disposition.
There’s a difference between abandoned by the going concern, and, abandoned by the bankruptcy estate. Most CH11 proceedings are a blend, where not all assets are kept by the going concern and some are cast off or abandoned by the current entity. Then they must be evaluated a second time to see if there is a liquidation value exceeding costs.
For example, if a cast off asset has 100k in value, but, is secured to a value of 140k, there is nothing to sell. It will then be released entirely to the secured creditor entirely, should the plan make a showing why paying off the debt is an excess burden on the going concern. Likewise, let’s say that 100k asset is securing 95k in debt. But the costs to reclaim, pay commissions or auction fees, what have you, cost more to sell than would be realized in a sale? Again, abandoned.
I don’t see the broadcast rights contemplated to be given up, such as SD, which are already some $20m underwater, have an excess value above their current fees arrangement.
The Padres broadcast rights are not underwater. Bally Sports SD is underwater. Padres TV ratings are at an all time high. People in that area are just not interested in the Ducks, Kings, and the other sports that RSN broadcasts.
You have far too much wrong beyond thar one overriding fat wrong to even try to correct you.
The biggest thing you have wrong is conflating the RSN with the baseball team. They broadcast 42 pro sports teams in all, not just baseball.
Selling the broadcast rights for the baseball teams alone does not have to pay the full $8.6 billion in debt Diamond Sports holds. It just needs to cover the $1.65 billion those teams are owed.
The secured creditor in this case is the baseball teams. MLB and the teams in question are chomping at the bit hoping to get those broadcast rights back so that they can move into streaming. Manfred said as much in December.
Remember that Sinclair was not the only bidder for the Fox Sports RSNs from Disney. MLB bid as well. At $7.1 billion MLBs bids was far closer to market value of the major sports broadcasting rights those RSNs held and MLB would not have had to borrow any money. Sinclair borrowed $8.6 billion. Borrowing comes at a cost. Thar debt is the major reason why they are losing money and they have said so in their statements.
The teams aren’t only owed 1.65 billion. That is a single year only 2023 figure. You need to add up all the remaining years for each team which is substantially higher.
As for the “value” on the rights, the only figure I’ve seen reported related to the Padres estimated at -20m in value. I’ll proceed under that premise in the analysis until better and more complete figures are forthcoming.
I don’t know about all the teams, but the Padres have 9 years and $540 million left on their deal.
The Padres had record high TV ratings last season, so their broadcast rights being upside down doesn’t make much sense. While Sports Business 24 mentioned that Bally Sports SD was one of the RSN’s losing money, they did not mention the Padres at all. Just the RSN.
In Sports Business 24 yesterday, they were saying that the Padres deal is the largest deal left under contract and that the total owed to baseball teams was less than 25% of the total debt owed by Sinclair and Diamond Sports. I guess I could go look up all the deals, but not going to invest that much time.
Are the broadcast rights considered assets or a debt? For a team like the Padres that are having record TV viewership, it would seem to mee that they are an asset.
For me, I want to see Sinclair be unable to totally divest of Diamond Sports Group and have to file Chapter 7. I would like MLB to get all of the broadcasting rights for those 14 teams back for free instead of having to bid on them in bankruptcy court like they did for the RSN’s that Sinclair bought in 2019.
MLB would be better off not being tied to other sports the RSN’s put on the air that cannot draw viewers.
It’s not a single year only because all the teams are owed about $2.25 billion in 2023 and the Yankees and Dodgers alone amount to $600 million of that.
Also, the teams are creditors in the situation and 13 of the 14 also hold ownership in the RSNs that broadcast their games. Those teams would get priority. They might be the only creditors that are allowed to vote by Judge Jones.
Add to that the fact that the judge can come to a creditor and say, “the court has a bid on the debt owed to you of blank, it’s less than you are owed, will you accept it?”
That happens in roughly 100% of chapter 11 filings.
Sinclair’s creditors which includes the MLB teams are almost certainly going to take less than they are owed or longer terms.
Hired Gun 23
It will get resolved and debt will be assumed…relax.
Debt assumed at pennies on the dollar.
If Diamond Sports felt that they could not continue to broadcast the games profitably and that the model was untenable at all, they would not be filing for Chapter 11 re-organization that allows them to maintain day-to-day operations while creating a plan to repay their creditors over a 5 year period. They would be filing a Chapter 7 and liquidating the business.
Chapter 11 does not relieve them of any of their debt and that includes what they owe the teams unless the bankruptcy judge that will be making all business decisions for the company decides that there is no way to make a profit.
Since broadcasting is the company’s business in its entirety, its unlikely a judge would permit them to renege on their payments for broadcasting rights that result in 100% of their revenue.
It is entirely possible that suppliers, vendors, banks from which they have taken loans, real estate lease holders, and other debt of that type could be written off or renegotiated with better (read longer) terms.
Hired Gun 23
Debt assumed nonetheless…
Diamond Sports said that they will continue to operate without changes this season. The bankruptcy judge will decide everything that is done now that they have filed. DSG won’t be making any of those decisions.
Hired Gun 23
And this will blow over, for most fans, once they realize they’re still able to watch their teams play without interruption. Even though the judge isn’t allowed to say it, “Play ball!” will be the theme of the proceedings…
Everything I’ve read says Diamond does make a profit. It’s just not a big enough profit to cover the debt from buying Fox Sports in the first place.
Again Pads Fans…. lots and lots of bad info here.
The biggest difference between CH11 and CH7 is whether any portion of the business can be cut away from the rest and remain a going concern with likelihood to succeed, or, if there is simply nothing left worth saving and liquidation is the preferred path.
Nothing about ch11 says you keep all aspects of your former operation. If you’re a retail chain, AFTER filing ch11 you seek to terminate and abandon leases on underperforming stores, and, focus on the more profitable locations. Maybe close some warehouses, tighten up the business model, but stay in the same line of business.
In a Bally context, it would be abandoning the distribution deals for those teams where there isn’t a sufficient profit margin to keep producing and selling the games to the fans. This may be based on soon to increase escalation clauses in future rights costs under existing deals.
There are cramdown provisions where you seek to have the court appraise the value of the asset and lower the cost to be commensurate with the value. Usually that is with regard to OWNERSHIP however, and not a lease for term. I’d expect the court not to go with a cramdown regarding TV rights because the asset, the rights, isn’t being bought, it’s a right to distribute for term. Kind of how they will cramdown an auto loan, but, usually just return the car to the lessor in a lease transaction.
The court may force through a restructuring on debt payment and values, but, I also suspect the creditors are sophisticated enough to know what they do, and don’t, have a realistic right to expect and will come to see the best deal they’re going to get and roll with it.
But, no, the court isn’t going to force bally to keep paying for every team just because it’s their line of business, just like they don’t force a store to keep every location open.
Bally is (somewhat) smart about what they’re doing. They have an idea how many fans they expect to pay ‘their price’ for a particular team’s games under their direct to consumer model. They also know what their costs are per team for production and distribution, and, they know what contracts call for, and, what advertisers are willing to offer within a market.
If, for example, there ARE four teams where the numbers don’t line up, or, barely break even, they will abandon those 4 deals for a leaner operation with a greater return per dollar. Each team’s rights is a separate contract, and, is evaluated on its own. A sophisticated businessman faced with two choices, $20,000 in costs for $80,000 in returns, or, $121,000 in costs for a $185,000 in returns goes for the former, not the latter. Return on investment is important, not just gross receipts. It’s not worth an extra $100k in costs to net an extra $4k in gains.
No court is going to allow any company to abandon salable assets. Certainly not one presided over by Daniel Jones or Marvin Isgur.
A broadcasting rights contract is a salable asset regardless of whether the company that mismanaged their money so badly that have had to file chapter 11 to try and stave off chapter 7 is losing money doing the actual broadcasting.
If they lose money on the sale of the asset that is better in the eyes of the court than abandoning assets entirely. At least some money is then going to the debtors.
A bankruptcy courts responsibility is to the debtors, not the company that filed chapter 11. The judge will make decisions based on whether or not the action will lead to those debtors being paid more of the money they are owed.
Yes, it will. You need to redefine saleable.
You don’t get to void the teams’ rights to fees to place other creditors above them, unless the express grant of those rights contained a subordination clause allowing other creditors a priority right to value higher than the team.
You are confusing what constitutes a salable right, and, what priority will be.
In bankruptcy you don’t take, say a car with a loan, sell it at auction, and divvy the money up to everyone. You need to look at the car, then take the car value, subtract the auto loan value (the secured creditor, which the teams are secured creditor up to the value of the fees arrangement), then subtract the costs of securing/reposessing the property followed by sale/auction costs. If the number is negative, you abandon the asset from the bankrupt estate to the secured creditor.
In this case, the rights may be worth 80m/yr, but, if they cost 110m/yr you don’t get to wipe that out, sell it for 80, and give that money over to everyone. There’s a surplus value component to it all, and, each individual ball club is its own secured creditor for the terms of its deal, and, first priority unless there was a subrogation clause in the rights contract which I can’t see why any team would’ve agreed to.
Been there, done that. Represented a bankrupt estate in the repurchase of assets from creditors under a round of new funding. Job was to find that sweet spot where the going concern was paying ad little as possible more than anyone else, while paying the lowest possible price. In our case the assets were unique enough that there was slightly higher value to our client keeping them, than there was to any outside party who needed to expend a sizable sum to obtain and transport them, and, the estate creditors realized a higher net from our bid than theyd have gotten after costs of sale from anyone else. Not always the case where it works out like that.
But back on topic, had the rights been openly assignable to a third party that would pay more than the current and future fees cost, Bally would’ve sold those chunks of the business off. It couldn’t find such a buyer as there was no surplus value.
As far as teams go, they’re not going to let the bankruptcy court sell off their rights at a loss and keep a percentage of proceeds on top of that, while losing the ability to select their own partner and deal.
My two cents for what it’s worth. Sinclair purchased the RSNs from Disney for far more than the amount being paid to the MLB teams. 42 teams are broadcast by those RSNs. Just 14 are MLB teams.
Sinclair paid Disney $10.6 billion for those RSNs in 2019 while the 14 MLB teams were owed $1.8 billion for broadcasting rights at that point according to the LA Times. I think it was Meg James that reported on it, but I could be mistaken. I will try to find a link.
Those rights are certainly something that can be sold to cover some of the $8.2 billion in loans Sinclair/Diamond Sports Group took out to complete the purchase and someone will pay the teams the balance of those deals as long as they don’t have to take on the non=performing sports and other programming.
It’s not the MLB broadcasting rights that are not worth what the teams are owed, it’s the RSN as a whole that broadcasts other sports and some unrelated programming that are losing money.
NHL broadcasts on Diamond Sports owned RSNs averaged ratings of 1.3 in 2022 while Padres games in 2022 averaged 6.86. The Padres were as high as a 9+ against the Dodgers and Giants. No business is paying as much for advertising on an NHL game broadcast as on a Padres game. Any NHL games on Bally Sports SD are costing the RSN money while the Padres games had enough eyeballs on the screen to be very profitable.
Another example of unprofitable programming is that there was poker on Bally Sports SD the other night. The Padres are certainly not responsible for Diamond Sports not being able to sell enough advertising on poker programming to cover the costs of putting that on the air.
A few weeks back Erik Greupner did an interview to discuss the Padres finances. One of the things that caught my attention was him talking about the increasing revenue from Bally Sports SD. He said that was due to increases in advertising revenue on Padres games.
So, if Diamond Sports is losing money on Bally Sports SD, that would indicate that it’s because of bad management practices on their part or the inability of the other programing being broadcast on that station to pull its weight, not the ability of the Padres to draw eyeballs to the screen. The Padres own part of that station, so I am sure they have a vested interest in making sure its profitable for Padres games.
I am not a bankruptcy expert and hope to never have to delve into the subject, so I will leave that part of the discussion to you and those other two. I just believe that Sinclair or the Padres would have no problem finding another party to buy the Padres broadcasting rights for what they are owed or more.
Websoul – you’re confusing the term. The 14 teams were owed 1.8billion for the single upcoming season, not the life of the remaining rights deals. That makes all the difference when you’re guessing at value.
In 2012 a backloaded 1.2B deal was signed that started with first year payments of around 28m/yr in 2012, and ending around 75m/yr in 2032. There’s still 10 years left on the backloaded deal 50% of its term.
Now, I’m going to do the worst thing ever and assume it’s somehow linear, and at 1.2B you can sort of extrapolate – avg 60m/yr, so, a year at 28m needs to be offset by 32m in future years above the avg… it’s easy to assume that there’s more than 675m due SD alone, and, the other 13 teams aren’t getting 1/6th each what the Padres are.
I do like the comparison to the NHL and the poker series rights, but, I also suspect their rights deals are far cheaper as well
The total that MLB teams are paid for all local broadcasts combined annually is around $2.25 billion. We don’t know exactly how much, because they are not all released to the public. That is slightly more than the combined national TV and streaming deals.
“Outside of the Angels, Rangers, and Braves, the 14 RSN’s owned by Sinclair broadcast MLB teams that are small to mid-market teams with annual rights fees that range from $40 to $75 million annually”. From SportsBusiness 24 article. Probably not supposed to quote content that is behind a paywall, but oh well.
The teams are the Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins. I could see those 14 teams combining for $750-900 million in broadcasting rights fees annually. Considering that the Dodgers and Yankees combine for about $600 million of that $2.25 billion total, that seems a good guess for those 14 teams.
The total owed to the 14 teams over the next 3 to 10 years left on the deals is certainly more than $1.8 billion.
What I do know is that MLB doesn’t really care if Sinclair cannot continue broadcasting MLB games.
Manfred said this yesterday; MLB described Diamond’s Chapter 11 filing as “an unfortunate development that we had been expecting.” While MLB expects Diamond to continue producing and televising its games, MLB “is ready to produce and distribute games to fans in their local markets in the event that Diamond or any other [RSN] is unable to do so.”
Tomorrow at 11:59 am Central Sinclair either needs to make their payments for the 2023 season to the Diamondbacks or relinquish the broadcasting rights. They are already late and the grace period is over at noon. We will know much more about how this is going to go down for the rest of the teams then.
The Padres deal included a $200 million payment upfront that went to the former owner. The remaining $1 billion in the 20 year deal started at $30 million annually in year one, not $28 million, $45 million in year 3, and goes up to as much as $75 million annually in the final season in 2031. There are 9 years and $540 million left on the deal. An average of $60 million annually. Those numbers are not in question.
Another thing to keep in mind is that the Padres were a 20% shareholder in the RSN initially and a condition of the sale to Sinclair was that the Padres share would increase, so Sinclair cannot unilaterally decide they will severe the ties to the team. We don’t know exactly how much the Padres ownership increased, but we know that it did.
NHL TV ratings on Bally Sports in San Diego are averaging less than a 1 rating and as low as a 0.3. For many games there were only a few thousand households watching the games in the entire market. SDSU games have better viewership ratings. The broadcasting rights for those hockey games are costing the station money. The Padres are not.
You are making many assumptions that are not facts. You are also trying to say that the RSN is only the baseball team, and that is far from true.
I quoted a number from a sportswriter. I should have looked deeper. I was wrong about how much total those teams are owed.
The 14 MLB teams that are under contract with Sinclair owned RSNs are not owed $1.8 billion for a single season. All teams in baseball combined only make $2.25 billion for local TV rights and the Dodgers make $320 million all by themselves. The TV revenue of those 14 teams is $720-$750 million for 2023 depending on the source with from 3 to 9 years left on the deals. No rights deal for those 14 teams goes beyond 2031.
The NHL controls the broadcast rights to all teams and Sinclair agreed to a 7 year deal starting work the 2021-2022 season that pays them a reported $400 million per year. That is less than the combined deals 14 MLB teams are contracted for individually.
I will refuse to believe any MLB team is operating at a loss until they open the books and prove it. And then we will simply know which teams should be sold or folded.
I’m happy if the outcome is good. I can watch local nfl games on local channels every Sunday. It’s about time MLB did the same.
Dream on that boat sailed years ago.
Manfred Rob's Earth Band
Which is unfortunate because that model has been working very well for the NFL.
Chapter 11 is reorganization, not total bankruptcy. They are looking to get new terms on their debt, not liquidate the company.
The worst case scenario is the teams lose 1 payment from the Diamond Sports and regain their broadcasting rights. Nearly all hold an ownership share in the station that broadcasts their games. That means that they can continue broadcasting their games and not be subject to the blackout provisions that the RSNs forced on them. It also opens their broadcasts up to be streamed on MLB.TV without those blackout restrictions.
According to Fierce Video, DIRECTV, DISH, COX, and NBC/COMCAST have already begun discussions with MLB about standalone local baseball channels for which they would pay a lower carriage fee than they do for the RSNs that carry multiple sports and which would not be subject to blackout restrictions.
In nurse follars
They are abandoning several contracts entirely and seeking to reorganize only the profitable deals.
That is not the way Chapter 11 filings work. You can start reading here:
Genuine question I’ve been wondering for years, why do all the writers use “MM” for millions? Why not just M? Does the other M stand for something or they just like the way it looks?
I never understood this myself. I just use M.
M alone is the Roman numeral for thousand. MM is used to denote thousand- thousands.
1 thousand thousands is a million.
Good call. Most Americans just use M. I think MM is more for Europe, and for some reason, India. But it’s been a while since I dealt with any of them.
Free Twins streams pleeeeeaaasee.
Albert Belle's corked bat
If MLB takes over broadcasting, how do the teams affected make money off of streaming rights?
MLB would be selling a la carte streaming deals on MLB.tv until broadcasting could continue on the major carriers like DIRECTV, Dish, NBC/Comcast, Cox, etc…
Something to keep in mind is that once they file for Chapter 11, Diamond Sports is no longer making any business decisions. They do not get to decide if they will abandon or reject contracts with specific teams. The bankruptcy judge will make ALL of those decisions.
So fans of the 4 teams named in the “report” don’t have to worry until the Chapter 11 is discharged and that can take a year or more.
The National Guard can step in.
Death to the RSN! MLB TV!
Yeah, I see that David Barron of the Houston Chronicle is reporting that the Astros and Rockets are looking into forming their own network out of the remains of AT&T Sports SW. Hope that goes better than the last time they tried that.
I just want the $13.99 Fubo RSN fee to go away.
Someone at MLB was not very thorough allowing 14 teams to contract with an unstable company.
The teams contacted with Fox, which sold to Disney, which sold to Sinclair, which spun the contracts off to the wholly owned Diamond Sports.
What is the other option? The RSN needs local sports to be in business and will pay the most $. Next best option and what could now happen is all the the teams starting their own network. Would much rather just take the $ and let the rsn do all the work.
my understanding is only Diamondbacks,padres,guardians and reds games will be free right? anyone able to definitively say otherwise?
Other rsn are in the same situation so more teams to come maybe.
Can’t wait to be paying $99.99 for MLB+
You can pay mine while your at it,eventhough I can afford it.
Dear people, Mark your calendars
Mlb.tv is for free to tmobile users (((also if you know someone with tmobile))) from March 28-April 4th using the tmobile Tuesdays app
You still have local blackouts, but VPN is your friend..for now
Someone already said this
Chapter 11? So nothing will change for a year or more until the bankruptcy is fully discharged.
I wonder if Isgur or Jones will handle the case or if Rodriguez will handle it because it’s a complex Chapter 11 filing. No matter who, it’s going to be interesting. Almost tempted to fly to Houston once the hearings start.
I am sure games will be streamed somewhere. I am mainly concerned with post season and all those games should be safe.
If you want to truly know why baseball has been dying, it’s because Bally made it next to impossible for fans to have easy access to watching any game, much less the fan favorite local time. Pace of play and all that I’m sure are a small factor, but when it’s impossible to watch the game, then the sport is going to naturally die off. Make the game stupid easy to watch, especially in local markets! Make baseball easy to watch again!
It was easy to watch. Subscribe to cable. Pretty freakin’ simple.
Well said Bravesfan. Absolutely spot-on accurate. MLB is unwatchable for a good chunk of the fans. There’s something to be said for free OTA viewing.
Free ota or bust
Bust then because that will never happen.
If the RSNs would all die, and MLB took over all the broadcasts, you could have true revenue sharing.