The Ohio Cup Trophy on the Bally Sports logo before the game between the Cincinnati Reds and the Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
Jiří Kubas | Diamond Images | Getty Images
Diamond Sports, the owner of regional sports networks, was ordered by a bankruptcy judge this week to pay full media rights payments to four Major League Baseball teams.
Diamond, which operates a portfolio of 19 networks under the Bally Sports brand, submitted the application bankruptcy in March, it seeks not only to restructure its debt load but also to reset some of its media rights agreements with teams to reflect so-called market rates in the wake of rampant cord-cutting.
The company sought to reduce payments owed to four MLB teams — the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins — which put it on a collision course with MLB officials in bankruptcy court this week. Diamond has previously paid teams as much as 75% of the payments owed as part of his bankruptcy, court documents show.
If Diamond does not make the remaining payments owed to the teams, the teams can withdraw from their contracts with the company, the court ruled.
The decision comes after MLB earlier this week he announced after Diamond stopped paying the team, it will begin producing and distributing San Diego Padres games in pay-TV packages and its MLB.TV streaming service. The matter in court did not affect the status of the Padres’ situation.
“MLB appreciates the decision of the federal bankruptcy court in Houston requiring Diamond to pay the full contract rate to the clubs,” an MLB spokesman said in a statement Friday. “As always, we hope that Diamond will continue to broadcast games and fulfill his contractual obligations to the clubs. As with the Padres, MLB will be prepared to make games available to fans if Diamond does not fulfill its obligations.”
The judge’s ruling came after a two-day hearing that included testimony from MLB Commissioner Rob Manfred and showcased the tension between the league and Diamond Sports.
A spokesman for Diamond said in a statement Friday that in accordance with the bankruptcy judge’s orders, “we look forward to working with MLB and our team partners to negotiate a rights package going forward that works for all parties and ensures Diamond’s long-term success.” .”
In particular, Diamond is pushing to hold the live streaming rights to all MLB teams that broadcast on its networks. Diamond currently has deals with all of its NBA and NHL teams, plus a handful of MLB teams for streaming rights.
The growing number of consumers cutting back on their traditional pay-TV packages in favor of streaming services has put a strain on the business of regional sports networks. Last year, Diamond launched its streaming answer with Bally Sports+.
Diamond pays fees to 42 teams across the MLB, NBA and NHL to broadcast most local games in their markets.
During the hearing, Diamond’s executive said Bally Sports+ has 203,000 subscribers, which is 55% of The Athletic’s target subscriber base. reported.
Diamond also faces more than $8 billion in debt that comes from Sinclair Broadcast Group10.6 billion dollars getting of regional sports networks in 2019.
Diamond is now an unconsolidated and independently managed subsidiary of Sinclair.