The Ohio Cup trophy on the Bally Sports logo before a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
Jerzy Kubas | Diamond Pictures | Getty’s paintings
Diamond Sports, the owner of regional sports networks, was ordered this week by a bankruptcy judge to pay full media rights to four Major League Baseball teams.
Diamond, which runs a portfolio of 19 chains under the Bally Sports brand, filed for bankruptcy in March in an effort to not only restructure its debt but additionally reset some media rights deals with teams to reflect so-called market rates in the wake of rampant cable cutting.
The corporate sought to scale back payments owed to four MLB teams – the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins – which brought it head to head with MLB officials in bankruptcy court this week. Diamond has already paid teams as much as 75% of payments previously owed in its bankruptcy, court documents show.
If Diamond fails to make the rest of the payments owed to the teams, those teams could walk away from their contracts with the corporate, the judge ruled.
The choice comes after MLB earlier this week announced it might begin producing and distributing San Diego Padres games on its pay-TV bundles and MLB.TV streaming service after Diamond stopped making payments to the team. The case in court didn’t affect the status of the Padres’ situation.
“MLB appreciates the Houston Federal Bankruptcy Court’s ruling that Diamond must pay the clubs the total contract fee,” an MLB spokesperson said in a Friday statement. “As at all times, we hope Diamond will proceed to broadcast matches and fulfill its contractual obligations to the clubs. As with the Padres, MLB will likely be able to make games available to fans if Diamond fails to satisfy its obligations.”
The judge’s ruling got here after a two-day hearing that included testimony from MLB Commissioner Rob Manfred and showed tensions between the league and Diamond Sports.
A spokesperson for Diamond said in a press release Friday that under the bankruptcy judge’s orders, “we sit up for working with MLB and our team partners to barter a package of rights that works for all of Diamond’s parties and positions for long-term success.”
Specifically, Diamond is pushing to keep up direct-to-consumer streaming rights to all MLB teams that air on their networks. Diamond currently has deals with all of its NBA and NHL teams in addition to several MLB teams for streaming rights.
The growing variety of consumers switching from traditional pay TV packages to streaming services has had an impact on the business of regional sports networks. Last 12 months, Diamond launched its streaming answer with Bally Sports+.
Diamond pays fees to 42 MLB, NBA and NHL teams to broadcast most local games in their markets.
In the course of the hearing, Director Diamond said Bally Sports+ has 203,000 subscribers, which is 55% of The Athletic’s subscriber goal reported.
Diamond also faces greater than $8 billion in debt arising from Sinclair Broadcast Groupacquisition of regional sports networks for $10.6 billion in 2019.
Diamond is now an unconsolidated and independently operated subsidiary of Sinclair.