Court Approves Portion Of Diamond Restructuring Agreement
Bankruptcy judge Christopher Lopez has approved two parts of the restructuring deal for Diamond Sports Group, reports Anthony Crupi of Sportico. The judge signed off on the January agreement that raises $450MM in debtor financing and reaches a $495MM settlement with Sinclair Broadcasting Group to resolve litigation which Diamond had filed against its former parent company. ESPN’s Alden González tweets that resolution of the overall bankruptcy likely remains weeks or months away, but this marks an important seal of approval for the company.
The agreements provide a potential path for DSG to continue operating its regional sports networks beyond this year. As part of the restructuring, Diamond agreed to sell the streaming rights to the MLB, NHL and NBA teams that it possesses to Amazon. The latter figures to create some kind of package on its Prime Video service for an additional fee.
Attorneys for Diamond have expressed hope that the cash influx will be able to keep the corporation afloat. Before the Amazon deal, the expectation had been that Diamond would wind down its involvement in the RSN business and shutter its Bally Sports networks after the 2024 MLB season. Diamond believes that will no longer be necessary, although the company’s long-term viability is still the subject of skepticism among league officials.
Diamond has in-market broadcasting for 12 teams but only possesses streaming rights for five of them: the Royals, Tigers, Marlins, Brewers and Rays. It has reached agreements with all 12 teams that it carried through the end of last year — DSG dropped the Padres and Diamondbacks midseason — to remain on the Bally networks for 2024. The Guardians and Rangers took slightly reduced rights fees to prevent Diamond from dropping their deals; it is believed that the Twins had to do the same after their TV contract expired at the end of 2023.
Rob Manfred Discusses RSN Situation, Expansion Timeline
Commissioner Rob Manfred covered a wide range of topics in yesterday’s press conference from the owners’ meetings. Along with comments on the Orioles’ sale agreement and the A’s ballpark plans in Las Vegas, he spoke of a desire to create an in-market streaming bundle as soon as next year.
“Realistically, my target to having a digital package I can take to market would be for the ’25 season,” the commissioner told reporters (link via Evan Drellich of the Athletic). The hope is to include at least 14 teams in a streaming bundle they can market directly to consumers without blackout restrictions.
MLB already makes out-of-market streaming for all 30 teams available via its MLB.TV platform. Most fans are unable to stream in-market games on MLB.TV because of restrictions in teams’ regional broadcasting contracts. With the RSN model on shaky ground for a number of clubs, MLB could be able to work around blackout issues for a number of organizations in the relatively near future.
The Diamond Sports Group bankruptcy provides the clearest avenue. Diamond has already dropped its deals with the Padres and Diamondbacks, putting the onus on MLB to handle those broadcasts. Meanwhile, AT&T abandoned its contracts with the Rockies, Astros, Pirates and Mariners this offseason. MLB is handling Colorado broadcasts this year. The Mariners, Astros and Pirates have all taken those responsibilities on their own, with the Astros and Pirates partnering with teams from other leagues in their respective cities as part of a new broadcasting arrangement.
Diamond is going to carry broadcasts for its remaining 12 teams in 2024. It is honoring its contracts in full with nine teams* and reached deals at slightly reduced rights fees to handle Rangers, Guardians and Twins broadcasts for another season. Drellich tweeted this morning that the bankruptcy court approved those contracts, as expected.
Whether Diamond will be able to maintain its operations beyond this year remains to be seen. The conglomerate is hopeful that it can stay in business after agreeing to sell whatever MLB, NHL and NBA streaming rights it possessed to Amazon in a deal that’ll bring in a short-term cash influx of $450MM. MLB officials have expressed some skepticism about that being enough to keep Diamond afloat for the long haul.
If Diamond were to collapse after next season, that’d revert the broadcasting rights for those 12 teams back to MLB. In addition to the three it already possesses and the potential to negotiate with Seattle, Houston, and Pittsburgh, the league could shop around two-thirds of its teams on an in-market streaming bundle by next year. MLB would likely have a harder time negotiating in-market streaming rights back from franchises like the Yankees, Red Sox, Dodgers and Cubs that are on stabler footing and handle distribution of their games on RSNs owned at least in part by the team.
Once there’s more clarity on the broadcasting situation, it seems the league will start laying the groundwork for a potential expansion process. “We’re going to have to get our footing on local media a little bit better. In times of uncertainty, it’s hard to talk about additional change,” Manfred said when asked about expansion (link via Jesse Rogers of ESPN). “Having said that, I have five years left. Those teams won’t be playing by the time I’m done but I would like the process along and [cities] selected.”
As Manfred indicated, his contract runs for another five seasons. The owners voted last July to extend his tenure until January 2029. While there’s little doubt they’d approve another extension if Manfred wanted to continue into the 2030s, his comments seem to suggest he could step away after this term.
That’d put the 2025-28 seasons as a loose timeline for the league to seriously evaluate options for moving from 30 to 32 teams. Manfred has previously made clear that there’d be no expansion consideration until the A’s and Rays stadium situations were sorted out. With those moving closer to resolution, albeit with plenty of controversy in the A’s case, expansion should be a more serious topic by the second half of the decade.
*Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals, and Tigers
Diamond Sports Group In Agreement With Rangers, Twins, Guardians For 2024
Diamond Sports Group has an agreement in place with the Rangers, Twins and Guardians, meaning Bally will plan to broadcast the games of those clubs this year, per Evan Drellich of The Athletic. The agreements are still pending court approval. The judge is expected to rule on these agreements February 9, per Alden González of ESPN. Drellich adds that the three clubs retain their streaming rights but each contract has a clause preventing them from doing anything with them this year.
“We are pleased to have reached agreements with the Cleveland Guardians, Minnesota Twins and Texas Rangers that work for all parties and enable us to continue delivering high-quality, live game broadcasts on Bally Sports to dedicated fans through the 2024 season,” reads a statement from a Diamond spokesperson, per Drellich.
The Guardians confirmed their agreement with a statement relayed by Ryan Lewis of the Akron Beacon Journal. “We can confirm we have reached an agreement with Diamond Sports Group for the 2024 season,” the club statement reads. “That agreement is currently pending court approval.”
It was reported earlier this week that the league expected Diamond to work out new deals with each of those three clubs and it now seems that the agreements are in place. The Twins’ previous deal with Diamond expired at the end of 2023. The Rangers and Guardians still had contracts in place but Diamond threatened to abandon them as part of the ongoing bankruptcy proceedings, citing them as unprofitable.
The details still aren’t known, but the reporting from earlier this week suggested the clubs would likely be paid at least 85% of what they were getting previously. The Guardians reportedly made $55MM from their deal in 2023 with the Rangers reportedly at $111MM. Even if they are going to get lower fees compared to the past, a new deal could at least give them some clarity over their 2024 finances, which could then impact how they proceed with roster moves in the coming weeks.
Not too long ago, it seemed as though Diamond was going to be abandoning live sports entirely after 2024. But a couple of weeks back, they announced a restructuring deal involving an investment from Amazon, a deal that Diamond believes can get it out of bankruptcy. If the bankruptcy court approves all of these details, Amazon will acquire the streaming rights of the Tigers, Royals, Marlins, Brewers and Rays. Per González, the ruling on that restructuring deal is expected February 26, with Diamond then having until March 22 to finalize the details for presentation in court.
Diamond only had the streaming rights for those five clubs, meaning it couldn’t sell rights for the other clubs that it broadcasts on television. The Rangers, Twins and Guardians will retain their streaming rights but won’t be able to work out a new deal this year. For fans in those markets hoping for changes to the direct-to-consumer model, it seems they may have to wait another year, assuming everything ends up being approved in court.
Diamond Sports Group Expected To Retain Guardians, Rangers, Twins Broadcasts For 2024
Diamond Sports Group has been renegotiating its in-market deals with the Guardians, Rangers and Twins as part of its ongoing bankruptcy proceeding. Evan Drellich of the Athletic reported this morning that MLB expects all three organizations to sign one-year deals to remain on Diamond’s Bally Sports networks for the 2024 season. None of those contracts have yet been finalized.
The Twins’ TV deal expired at the end of the 2023 season. The Rangers and Guardians still had contracts with Diamond, but the broadcasting conglomerate had called those deals unprofitable and threatened to abandon them if they weren’t renegotiated at a lesser fee. Diamond already dropped contracts with the Padres and Diamondbacks during the ’23 season.
That left Cleveland, Texas and Minnesota to discuss reduced terms or to risk losing their local broadcasting fees entirely. According to various reports, Cleveland made $55MM off their TV deal a year ago. Texas took in around $111MM from Diamond, while Minnesota’s contract paid $54MM in its final season.
The specific terms under discussion aren’t known. However, Drellich reports that the Guardians and Rangers are expected to lose 15% or less of what they otherwise would have received in 2024. It’s unclear how much of a reduction Minnesota might need to take on their next contract. On the one hand, that’s still an unenviable position for those organizations. A 15% reduction could knock roughly $8.25MM off the Guardians’ expected revenues, while the Rangers’ deal could be reduced by something in the $17MM range by that criteria. (The precise figures are unclear, since the teams’ anticipated rights fees in 2024 were not necessarily the same as what they’d made in ’23).
At the same time, recouping 85+% of their expected fees is still a better outcome for those teams than moving on from Diamond entirely, which likely would have required the teams to turn to MLB to handle in-market broadcasting. That’s particularly true for Texas, which had one of the game’s more profitable RSN agreements. A one-year deal will still leaves the teams with long-term uncertainty, but they appear on track to remain on the Bally Sports networks for at least one more year.
If/when the new deals are finalized, Diamond will again be responsible for in-market televising for 12 teams. The company has already stated it’ll honor next season’s commitments at full price for the Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals and Tigers. Whether Diamond will be able to operate beyond the ’24 MLB season remains to be seen. Its recent restructuring agreement to sell its in-market streaming rights to Amazon for an influx of $450MM is designed to keep the company afloat beyond this year. That is still pending approval from the bankruptcy court. Drellich notes that some within the baseball industry remain skeptical about Diamond’s long-term viability even if the court signs off on its streaming deal with Amazon.
MLBTR Podcast: The Broadcasting Landscape, Josh Hader and the Relief Market
The latest episode of the MLB Trade Rumors Podcast is now live on Spotify, Apple Podcasts, and wherever you get your podcasts! Make sure you subscribe as well! You can also use the player at this link to listen, if you don’t use Spotify or Apple for podcasts.
This week, host Darragh McDonald is joined by Anthony Franco of MLB Trade Rumors to discuss…
- The RSN model for MLB clubs (1:00)
- The latest details on the Diamond Sports Group bankruptcy (4:05)
- The Astros signed Josh Hader (12:35)
- The Angels signed Robert Stephenson (19:05)
- The Pirates signed Aroldis Chapman (21:50)
Plus, we answer your questions, including…
- Does J.D. Martinez make sense for the Angels? (24:30)
- With the Mets in rebuild/retooling mode and the Mariners in need of another infield bat (and a surplus of controllable young arms), is there a trade there? (27:55)
- How odd is it that we are this late in January and have several players likely to get multi-year deals? (31:55)
Check out our past episodes!
- The Cubs’ Activity, Marcus Stroman And Jordan Hicks – listen here
- Teoscar Hernández Signs With L.A. And The Move-Making Mariners and Rays – listen here
- Yoshi Yamamoto Fallout, the Chris Sale/Vaughn Grissom Trade and Transaction Roundup – listen here
The podcast intro and outro song “So Long” is provided courtesy of the band Showoff. Check out their Facebook page here!
Latest Details On Diamond Bankruptcy
The Diamond Sports Group saga took another turn yesterday when the broadcasting company announced a restructuring agreement that’d see debt holders invest $450MM to keep the company afloat. As part of the deal, Amazon would receive streaming rights for the NBA, NHL and MLB teams for which Diamond currently holds those rights.
While there’s an agreement in place between Diamond and Amazon, it’s worth emphasizing that the plan can’t become official without approval from the bankruptcy court. That’ll take time as the court and Diamond’s creditors sort through the details.
Evan Drellich and Mike Vorkunov of the Athletic report that Amazon would pay $115MM, with an additional $50MM investment possible. While that’d entitle them to streaming rights for every NBA and NHL team that contracts with Diamond, it’s only applicable to five MLB teams. Diamond has streaming rights for the Royals, Tigers, Marlins, Brewers and Rays. Those clubs would still be broadcast on cable on Diamond’s Bally Sports networks, but in-market streaming access would move to Prime Video. MLB has opposed selling additional streaming rights to Diamond, but Alden González of ESPN reports that Amazon’s involvement is not conditional on further streaming acquisitions.
Until this week, it had seemed likely Diamond would abandon the regional sports network entirely after the 2024 MLB season. The agreement with Amazon represents a significant shift and leaves a few MLB teams in a state of continued uncertainty.
Diamond holds broadcasting deals with 11 MLB teams. The corporation’s attorney said yesterday that nine of those clubs — the Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals and Tigers — will be paid in full for the ’24 campaign (relayed by González). The company is seeking to renegotiate its deals with two others, the Guardians and Rangers, at lesser fees. It is also in discussions with the Twins, whose previous contract with Diamond expired at the end of last season — leaving them as something of a broadcasting free agent.
The Diamond attorney informed the court yesterday that the company has offered terms to each of the Cleveland, Texas and Minnesota organizations to continue broadcasting their games in 2024 (via The Athletic). He said the company expects answers from all three franchises by the start of February. A hearing scheduled for tomorrow morning has been postponed indefinitely so the sides can review the framework of the streaming deal, per Drellich and Vorkunov.
None of the Rangers, Guardians or Twins are obligated to accept reduced rights fees. If they decline, however, it seems likely Diamond will drop the Texas and Cleveland contracts and leave Minnesota without a deal. Diamond already showed a willingness to abandon unprofitable terms during the 2023 season, when it dropped agreements with the Padres and Diamondbacks.
That leaves Texas, Cleveland and Minnesota without a ton of leverage. Diamond’s attorney said one of the organizations (without specifying which) plans to negotiate a deal that would even extend beyond next season, as relayed by The Athletic.
The uncertainty has been reflected in those franchises’ activity, or lack thereof, in free agency. Minnesota declared they were cutting payroll at the start of the offseason. They allowed Sonny Gray and Kenta Maeda to depart and have thus far signed one free agent to a major league contract. That was a $950K guarantee for reliever Josh Staumont, who is rehabbing from thoracic outlet surgery.
Texas is coming off a World Series that’d normally spur a team to act aggressively in the offseason. Instead, GM Chris Young indicated they wouldn’t be as active as they’d been in previous winters. The Rangers have signed a few free agents — most notably a two-year, $22MM pact for Tyler Mahle — but they haven’t splurged at the top of the class. The broadcasting situation is commonly cited as a reason they haven’t brought back Jordan Montgomery, who remains on the open market.
Cleveland is never a big spender, so the lack of activity on their end is characteristic. Still, the club is seemingly operating with limited flexibility. They’ve taken on some salary in the Scott Barlow trade and signed Austin Hedges to a $4MM free agent deal.
Whether all those teams can reach a new contract with Diamond should become clear in the next few weeks. Even if they stay on the networks for next season (and potentially beyond), it’d come with some kind of hit to their revenues. Paul Hoynes of Cleveland.com reported the Guardians made $55MM in local rights fees last season. It was a similar amount for Minnesota, whom Phil Miller of the Minneapolis Star-Tribune reports received $54MM in 2023. Evan Grant of the Dallas Morning News wrote yesterday the Rangers’ deal has paid around $111MM annually.
If any of those teams don’t reach an agreement, they’d join a trio of clubs likely to operate without an RSN deal this year. MLB stepped in to handle in-market broadcasting for Arizona and San Diego last season. While MLB subsidized a portion of the D-Backs and Padres deals last season, commissioner Rob Manfred has made clear they won’t do so next season. Allowing MLB to handle the broadcasts would likely be less profitable for the teams than if they land a new deal with Diamond.
It seems MLB is also going to handle broadcasts for the Rockies, whose contract was dropped by AT&T SportsNet Rocky Mountain at the end of 2023. Patrick Saunders of the Denver Post reported this month that MLB is expected to stream Colorado games in-market on its MLB.tv platform, as it is doing with the D-Backs and Padres. The Rockies made roughly $57MM off their broadcasting deal a year ago, Saunders adds.
Diamond Sports Group Announces Restructuring Deal Featuring Investment From Amazon
9:50am: Josh Kosman of The New York Post reports that Amazon is giving Diamond roughly $100MM for the streaming rights of the Tigers, Royals, Marlins, Brewers and Rays. That money and the Sinclair settlement money could be presented to a Houston bankruptcy judge as early as today.
8:45am: Diamond Sports Group announced that is has a restructuring support agreement in place that will allow it to emerge from bankruptcy and continue operating, as relayed by Brendan Coffey of Sportico. It apparently has approval from most of the company’s debt holders and also features an investment from Amazon. It also has a $495MM deal from Sinclair Broadcasting Group to settle outstanding litigation.
“We are thrilled to have reached a comprehensive restructuring agreement that provides a detailed framework for a reorganization plan and substantial new financing that will enable Diamond to operate and thrive beyond 2024,” Diamond CEO David Preschlack stated. “We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business. Diamond’s near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.”
As noted by Coffey, Diamond is in Chapter 11 bankruptcy, which means that any deals will have to be approved by the court. But Diamond also says they have a deal in place with some debt holders to raise $450MM of “junior secured superpriority debtor-in-possession financing.” If the company can wriggle out of bankruptcy or get the court’s approval, this has the potential to be a significant development for them and for baseball.
Cord cutting in recent decades has led to significant challenges for the regional sports network (RSN) model, wherein RSNs pay millions of dollars to clubs for their broadcasting rights. The ongoing bankruptcy of Diamond Sports Group, which owns Bally Sports, has impacted the roster moves of several clubs. The company dropped its contracts with the Padres and Diamondbacks last year, with Major League Baseball stepping up to take over local broadcasts. Their contract with the Twins expired after 2023.
The Padres and Twins have each been operating with lower payrolls this year compared to last year, with the loss of RSN revenue a clear factor. There are 11* other teams that still have deals with Diamond but the uncertainty around how things would proceed has seemingly impacted some of them as well. For example, the Rangers are one of those 11 clubs and they have been acting with less aggression this winter, despite having just won the World Series. It has been speculated by some observers that their desire to re-sign Jordan Montgomery, or to make other theoretical moves, might hinge on the development of this bankruptcy and their broadcast situation.
Part of the proposal will see Amazon make a minority investment and offer direct-to-consumer services on their Prime Video platform. That will apparently include games from MLB, NBA and NHL, including pre-game and post-game content. The full details of those offerings aren’t fully clear at the moment. It was reported back in December that Amazon was discussing a streaming deal with Diamond but the latter company only had streaming rights for five clubs: the Tigers, Royals, Marlins, Brewers and Rays. Reporting from last week suggested that MLB shot down the discussions between the two companies, perhaps with the intent of negotiating a deal with Amazon directly.
In addition to the impact on clubs and their finances, it’s also possible this will have an impact on fans. The RSN model involved widespread blackouts, as those RSNs wanted to ensure customers were watching on cable on not on a streaming service like MLB.TV. These blackout areas have often been frustrating for fans due to some absurd overlap, such as the fact that the people of Iowa couldn’t stream games featuring the Cubs, White Sox, Cardinals, Twins, Royals or Brewers.
Things have been gradually shifting towards a direct-to-consumer model, with MLB having expressed a desire to embrace that path forward. When the league took over the Padres’ broadcasts in May of last year, they announced that people in the San Diego area could stream games blackout-free for $19.99 per month or $74.99 for the remainder of the season.
As for Sinclair, they bought Diamond in 2019 but the companies began operating independently after Diamond accused Sinclair of siphoning funds from the subsidiary.
Many of the details are still to come and there are still hurdles to clear but today’s news is a notable development for many facets of the baseball world.
* Those clubs are the Angels, Braves, Brewers, Cardinals, Guardians, Marlins, Rangers, Rays, Reds, Royals, and Tigers.
Latest On Diamond Sports Group Bankruptcy
Major League Baseball and Diamond Sports Group are continuing discussions about the broadcasting conglomerate’s ongoing bankruptcy. A hearing initially scheduled for Wednesday morning was delayed to Friday, January 19, according to Evan Drellich of the Athletic.
That suggests MLB and representatives for Diamond feel there’s still something to be gained from talks. At the same time, it moves ever closer towards Opening Day without a firm resolution for teams whose local broadcasting deals run through the Bally Sports networks.
As recently as last season, Diamond’s Bally Sports RSNs carried in-market broadcasts for 14 teams. The struggling corporation dropped its contracts with the Padres and Diamondbacks midseason, leading MLB to take over local broadcasts for those franchises. Bally’s contract with the Twins ran its course at the end of the 2023 season.
That presently leaves 11 teams* who have deals with Diamond for in-market broadcasting in 2024. However, Diamond has suggested it could abandon its contracts with the Guardians and Rangers this offseason unless the terms of those deals are renegotiated. Meanwhile, Drellich reports that Diamond and MLB are in discussions about a possible contract to carry Twins’ games for another season.
It is unclear if Diamond will operate in any capacity after the ’24 campaign. The Wall Street Journal reported last month the company was in discussions with Amazon about potentially selling streaming rights for a short-term influx of cash that could help keep Diamond afloat.
However, Diamond only holds streaming rights for five of the 11 teams with which it has a TV deal. MLB has been reluctant to provide further streaming opportunities. The New York Post’s Josh Kosman reported on Monday that MLB shot down discussions between Diamond and Amazon — potentially with an eye towards negotiating a separate streaming deal with Amazon directly.
* Those clubs are the Angels, Braves, Brewers, Cardinals, Guardians, Marlins, Rangers, Rays, Reds, Royals, and Tigers.
Amazon, Diamond Sports Discussing Potential Streaming Deal
December 19: Evan Drellich of the Athletic reports that Diamond has streaming rights for five of the MLB teams whose broadcasting deals it covers: Detroit, Kansas City, Miami, Milwaukee and Tampa Bay. Even if an agreement between Amazon and Diamond is reached with regards to streaming, they would need to negotiate additional deals with MLB if they want to stream games for any of the other six clubs.
December 18: One of MLB’s bigger off-field stories of the past year has been the bankruptcy of Diamond Sports Group. The conglomerate’s struggles to meet its broadcasting deals has left teams contracted with Diamond — which operates the Bally Sports regional networks — in uncertain positions about the revenues they can expect from their local television contracts. That has been reflected in a few clubs (e.g. Padres, Rangers, Twins) cutting or plateauing spending.
As Diamond’s bankruptcy process continues, Lauren Thomas and Joe Flint of the Wall Street Journal report that the corporation is engaged with Amazon about a potential multi-year streaming agreement. The discussions, which are not complete and would need to be approved by the bankruptcy court even if Diamond and Amazon reach an agreement, would see Amazon invest in Diamond with a goal of eventually acquiring streaming rights for teams on those broadcasts. Diamond would continue to operate its cable networks.
There has been a general expectation that Diamond’s reorganization will see the business abandon all of its broadcasting deals with MLB after the 2024 season. Evan Drellich of the Athletic wrote last week that Diamond and MLB were nearing agreement on a deal that would at least provide clarity on how which of its 11 contracts* it would honor for the ’24 campaign. The Athletic reported last month that the company was considering dropping its contracts with the Rangers and Guardians before next season.
Even if Diamond meets most or all of its obligations for next season, those clubs won’t have clarity on how things will play out in 2025 and beyond. The potential for Amazon to support the company in exchange for streaming opportunities offers some optimism, but it remains very early in that process.
* The Angels, Braves, Brewers, Cardinals, Guardians, Marlins, Rangers, Rays, Reds, Royals and Tigers have existing contracts with Diamond. The company abandoned deals with the Padres and Diamondbacks during the 2023 season, while its contract with the Twins expired at the end of the year.
Diamond Sports Group Could Drop Guardians, Rangers Broadcasts
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.