The ongoing Diamond Sports Group bankruptcy could soon affect another two franchises. Evan Drellich and Mike Vorkunov of the Athletic report that the broadcasting corporation is considering dropping its in-market TV deals with the Guardians and Rangers before the 2024 season.
Diamond, which operates the Bally Sports networks, already severed contracts with the Padres and Diamondbacks during the 2023 campaign. MLB stepped in to handle in-market broadcasting for those clubs. Diamond had sought to pay reduced rights fees to the Twins, Reds, Guardians and Rangers during the year as well. The bankruptcy court eventually awarded those teams their full rights fees.
If Diamond officially drops two more agreements, the Cleveland and Texas organizations will have to find alternate means of broadcasting within their local markets. MLB could step in to ensure those games aren’t blacked out, as it did for the Padres and D-Backs. Perhaps the franchises could line up an agreement with a new regional sports network during the offseason. In any event, it’s a suboptimal situation — albeit one which team executives were surely anticipating at this point.
“Our intention is to broadcast almost all of (our) Major League Baseball teams next year,” one of Diamond’s attorneys said in today’s bankruptcy proceedings (relayed by Drellich and Vorkunov). “There are a few, a very few, for which we do not have agreements in place. And that, frankly, at this point, are too expensive for us to broadcast without concessions. I am told that those discussions are taking place, there have been reach-outs to both of the teams involved.”
Diamond has local broadcasting deals with 11 teams. That figure was 14 at the beginning of the ’23 season. In addition to the lapsed deals with San Diego and Arizona, Bally’s contract with the Twins expired at the conclusion of the year. Dan Hayes of the Athletic wrote yesterday that a new short-term deal with Diamond to carry Minnesota’s 2024 broadcasts hasn’t been ruled out.
The Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals and Tigers also have existing contracts with Diamond. Jonathan Randles and Steven Church of Yahoo! Finance write that attorneys for both Diamond and Sinclair — the media conglomerate which had acquired Diamond in 2019 — indicated in today’s court proceedings that Diamond might be liquidated entirely at the end of the 2024 MLB season. (Sinclair and Diamond now operate independently after Diamond accused Sinclair of siphoning funds from the subsidiary.)
The uncertain TV rights picture could impact the spending habits for those franchises. The Twins are scaling back payroll this offseason. Only the franchise’s ownership and front office know precisely how much that’s a result of the TV picture, but Minnesota president of baseball operations Derek Falvey has called it a contributing factor.
While the Twins have run almost exactly average player payrolls, Cleveland and Texas have been on opposite ends. According to Cot’s Baseball Contracts, the Guardians ranked 25th in Opening Day payroll this year. The Rangers opened the season ninth and have the fifth-highest projected outlay for 2024 on the heels of their World Series win.
That’s it. Listen for the owners to cry poverty.
To be fair the fans are supporting it too. For every free agent article on here I see them nickel and diming the expectations of their teams owners
Is announcing lower revenue the same as crying poverty? I think not. I believe everyone on this site knows that TV rights is a teams major source of income. If you and your wife both worked, and one of you lost your job, wouldn’t you cut back on spending?
Hence, this is why the Guardians will acquire Cash for Cal Quantrill. So with so many Cashes in the the lineup next year , let’s go to green and white uniforms.
I can never find Cash Considerations stats on baseball reference.
This model didnt make sense 20 years ago and its totally beyond repair now. End territorial blackouts and let the chips fall where they may.
Good, neither team offers something worth watching.
Did the Rangers win the world series?
Yes so all the “will they wont they” suspense has been lost.
The Rangers won the world series and the Padres took out a 100 million dollar loan? Then the owner under the stress of being lied to by FTX and Tom Brady died? Wow diamonds bankruptcy sure has shaken things up….
Bad joke, even for you.
@Pete zahut
No more suspense on whether they will get a championship or not.
Old York is a troll. Treat accordingly.
@LordD99
I’m glad you have the qualifications of a troll to properly identify one…
But doesn’t that say a lot about the quality of a “world champion” when an RSN is willing to forfeit their broadcast rights?
Murica, F@&k Yeah! Murica, F@&k Yeah!
it says the Rangers made a better deal with diamond than other teams did and that’s why diamond is thinking about dropping them. it sounds like other teams are willing to negotiate for less money but the Rangers arent. I think the Rangers want their rights back anyways because they can get more money elsewhere
The 2022 Guardians were a pretty damn fun team to watch
No, the Indians were not a fun team to watch this year.
The 2022 Guardians were fun to watch. The 2023 Guardians weren’t very fun to watch.
@old York
Dude, look at his comment….it says 2022 NOT 2023 and if you look at the calendar it says 2023, so yeah last year Indian team was a fun team to watch.
Third place, 11 games out, sub .5000 must have been a real joy. This gives woke Dolan another excuse not to spend.
Boo
Old York is someone who enjoys watching paint dry and counting different license plates.
You’re an idiot who’s upset that the team he likes isn’t worth watching.
Will this affect the Rangers ability to pay Ohtani ?
No. because he’s signing with the Angels. So you and the Rangers can sleep well tonight knowing this.
I’d say things worked out pretty great this year, so we’re sleeping pretty well already.
Obviously Ohtani is incredible, but I think most of us Rangers fans would rather see them pick up a few pitchers instead of throwing all of our money at one guy. We could really use a guy like Hader plus a couple more arms.
If we keep throwing out these long term deals to free agents we are going to end up with a lot of old guys getting paid a ton of money in a few years. You can’t have a team full of mid 30s guys on huge contracts and expect to put out a good team.
Right now I think most of us are expecting Carter to move to CF once Langford gets called up and takes LF. Or potentially Langford becomes the usual DH and Taveras keeps his job. I’d say most of us are rooting for Taveras to become the 4th outfielder and us add a bat for some DH at bats. Foscue is still an option to get some DH time and a little bit of infield work for guys on rest days.
I think the Rangers will have to trade some of their infielders since they have way too many. There’re a lot of very good players who can’t play for the Rangers right now because they’re blocked by all the very good players they already have
If you’re expecting the Angels to retain Ohtani, you’re likely going to be the one not sleeping well this year.
Aside from them absolutely blowing away each and every other offer on the table, why would he want to go back there? They proved in each and every one of his years with the team that with him on a more affordable contract that they couldn’t put a team around him to compete, whether through their farm or through free agency.
This past year they even tried to sell a bit of the farm to get some rentals, still missed out, and just dumped all the salary they could before September 1st to duck the luxury tax line if possible.
Ohtani has said he wants to play for a competitive team. The Angels have proved for even most of the time of Mike Trouts career as it is, as well as the whole time they’ve had Trout and Ohtani together, that they are not a competitive team. They might spend enough to look competitive, but their results show otherwise. I’ve seen many say there’s less than a 10% chance he resigns with the Angels over the field. I’d say even giving them a 10% chance is generous. He’s gone.
I would imagine yes. It’s rumored that it’s Diamond’s most expensive deal remaining at around $100MM per year. That’s a lot of revenue to lose. The team has publicly said they’re not concerned, but that might be the only thing they could say.
$112M as of 2022.
So yeah, that’s a ton to lose.
When MLB broadcasts the game doesn’t the team get a piece of the advertising? So they are cutting out the middlemen. Wouldn’t they make just as much money?
The team retains the broadcasting rights and MLB does the production of the broadcast if the team asks them to. They did that at first for the Padres.
The Padres are making more money than they did with DSG. As you said, they cut out the middleman and signed deals directly with Cox, Spectrum, AT&T, DIRECTV, and FUBO to broadcast their games. They also started selling those individual team MLB.tv packages that don’t blackout local games.
There is a reason that at last years Winter Meetings that Manfred was practically giddy in that press conference where he discussed the possibility of RSN’s going belly up. He said at the time that MLB was ready for that and it turns out he was telling the truth.
MLB is not going to continue making the full media rights payments to every club dropped by Diamond. Adding over $160 millon for the Guardians and Rangers may be the tipping point.
The reason Diamond is dropping the teams is because they were losing money on those contracts. A lot of money. Cord cutting has drastically reduced the number of non fans paying for a service they didn’t want. Let’s see how much money is there for direct subscription.
Sinclair dropped the packages because they were unprofitable. Fewer cable subscribers than when deal was signed. Advertisers pay based on viewership. Lower numbers mean lower rates. MLB broadcasts will have the same difficulty. They won’t be paying that old rate to the team. Even with new streaming options, signups will be slower to develop. Even Pads Fan doesn’t have access to the numbers. Its anyone’s guess as to more or less dollars as it plays out. But a drop in revenue, at least initially, would not be surprising.
Sinclair is such a nasty outfit. No one should be surprised that they have been accused of purposely running their subsidiary into the ground.
As long as MLB has the RSNs, this baloney will continue. Robby the robot needs to get rid of local TV contracts, broadcast all games without blackouts on MLB TV, and split the fee money evenly across all teams.
You thinkteams in the LA and NY Markets are going to be happy getting the same amount of money as teams in AZ and Cleveland.? The contracts value are based on a number of things. most importantly market size. National TV contracts are paid out evenly. But not regional.
Between cable and streaming, sports broadcasting is a mess right now. It’s all over the map.
It’s not a mess. Sinclair doesn’t know how to handle things.
Would be cool if MLB just swooped in and took over at this point and removed blackout restrictions. Cause this is absurd.
I Want My M-TV
CLE should just turn the broadcast rights back over to WUAB. They did a great job the first go ‘round.
I agree on the earlier comments re Sinclair, Diamond is already a mess, that they are acting in bad faith as corporate parent is very problematic.
These local TV contracts are the principal driver in rising franchise values across the league, that prior to the start of 2023 season Diamond RSN had 14 of the league’s 30 teams, and now each of those 14 has some uncertainty as to future cash flows. Given local TV rights are a larger % of team’s annual cash revenue vs the past this makes long term operating/planning a challenge.
Teams manage their payroll on a short, medium and long term basis with the idea these RSN contracts will be honored and the cash flows will be paid. Now impacted teams need to operate that in the short term they likely won’t be paid the full value of their respective contracts for the 2024 season, who knows what visibility teams have, how much of a haircut will they take in 2024.
This is problematic for the Marlins, Brewers, Reds, Cardinals and Diamondbacks in particular, teams in the playoffs in 2023, on the rise (Reds) and in case of Cards looking to be major players in free agency. We already see the issue it’s causing Padres and Twins.
The 2023-24 off-season is setup to see a player or two lose the game of “musical chairs” and not find a contract. It will be interesting how derogatory Boras will be about this topic, it does mess a little with his typical game plan of waiting out the market. He doesn’t have Ohtani but does as always have a large number of clients.
The Padres had new, individual contracts with Cox, Spectrum, AT&T, DIRECTV, and FUBO the day after DSG defaulted on May 23rd. Then they were the first team to be allowed to sell individual team packages on MLB.tv with no local blackout.
The Diamondbacks were back on TV with new contracts for Cox, Spectrum, DIRECTV, and FUBO the day after DSG was allowed to drop their broadcasts on July 18th.
Does anyone really think it will be any different with the Rangers and Guardians?
Pads aren’t my team so I don’t know if this info has been released. Clearly they found TV homes, but given reports that in-season San Diego had to borrow a big chuck of $ strongly suggests they were not made whole and took a large haircut vs what Diamond was supposed to pay them.
Baseball teams are highly seasonal businesses, all have lines of credit with banks to manage the “off-season”, a team having to borrow $ in season ~ in the summer is crazy. If anyone here is a SD season ticket holder, I bet the team has pushed forward how early you pay them for your 2024 season tickets, maybe even pushed through a small increase too, yes?
I’m a corporate finance guy so this is just a business note that likely impacts most all teams. Interest rates went from 0% just prior to the start of the 2022 season to 5+% in just 15 months.. An MLB team is likely now paying at least ~ 10% on their short term borrowings, That isn’t taking into account any long term debt a team might carry and whether or not that debt is fixed or variable. You’d like to think teams made the sound decision to get most of that debt fixed at historic low rates.
Still cash is king, kudos to the Padres for running a max payroll based on their projected revenues, but without a doubt they and other teams have gotten screwed in the short term and until this is a resolved on a long term basis they, the Twins have to scale payroll back.
To everyone who says “the owner is a billionaire he can just put in money”, it’s not that simple. He’s not the sole owner, this would be a capital call where all the team owners would need to put in $ based on their ownership %. To complicate matters the principal owner just passed away, who’s to say his heirs have the same passion for the team that he did. This is crappy for all teams impacted by the uncertainty of their RSN.
Most people don’t have cable, so they can’t access Bally Sports. Viewership is falling which is causing Ballys to drop one team at a time. I doubt they will end up with any teams at all.
RIP Ballys
I don’t have cable and I watched through the Bally app
After it was clear that Diamond was going belly up they completely revamped the Bally app and eliminated the Cast button so you can no longer watch on any device other than your phone. Why waste the money doing that in the first place and why drop casting? It’s completely idiotic.
Your comment made me think – when was the last time I had cable? It’s been about 11 years now. Cable has gone the way of the landline phone. No wonder these companies are sinking ships – clearly they weren’t expecting so many people to abandon cable altogether permanently.
Any team who is dealing with Ballys is less likely to spend because of this. A lot of guys will go unsigned and the MLBPA will cry collision or something. I called this originally when the season ended.
Robby the robot really dropped the ball on Ballys, but his large market masters don’t want their big local TV revenue advantage to change, so the madness continues.
Fubo is charging me an extra 13 bucks per month for Bally Sports Southwest. If the Rangers aren’t on that channel, then I’ll have no interest in paying for it.
If this means we no longer suffer listening to manning, underwood and knaut,easily the most annoying broadcast team in the history of sports broadcasting the end of bally and diamond for guardians games will be a blessing. Im tired of turning down the tv sound and listening to hamilton and rosie out of sync on the radio.
I highly doubt that’ll be impacted. When the Padres’ broadcasts were taken over by MLB, the same broadcast team was in place.
I’ve never cared for Matt Underwood in any capacity. He’s a prime example of how everyone rises to their level of incompetence. Every year I think they’re gonna replace him, and they never have.
I’m ok with Underwood and Manning but Knott is horrible.
Underwood and Knott think they’re comedians…..annoying.
Manning at least says it like it is when players do something stupid
Broadcast stations don’t make any money. It’s a crumbling enterprise. Just go 100% streaming and ban blackouts. Time to get with the times.
Anyone that believes this does not have short term ramifications on team revenues is wrong. Even if the solutions have the potential to increase revenues in the future having your main source of revenue dry up abruptly has to lead to less spending this off-season for those affected.
Cle FO just admitted broadcast uncertainty led to the DFA of Quantril.
It won’t be the last one either.
*was a factor in. Not led to.
A top attorney for Sinclair told financial news site Bloomberg yesterday that Diamond Sports Group “may liquidate next year if it can’t find a way to keep the company operating beyond 2024”. (per Sports Business Journal)
Circle 9/29/2024 on your calendar as that’s the final day of baseball’s regular season and potentially the final day of the Bally Sports RSNs.
all baseball games should go back to the way they were. they used to be free on a local channel and you didn’t need cable or satellite. the Rangers used to be on channel 21 or 27 on free TV. even when rsns became a think half the Rangers games were still aired free over one of the local channels.
Are TV stations still broadcast over the airwaves? i.e. “free”? I honestly have no idea. Vaguely recall that ended some years ago.
This is a transitional period as the RSN model is dying, but in the end, content is king, MLB teams have a ton of content, teams have branding, and they will eventually figure out the new revenue model. They knew this was coming, but sometimes you have to arrive at the precipice before hitting the brakes and figuring the way out.
Now if we could only get rid of Mad Dog Russo
I agree wholeheartedly!