Report: MLB, NBA, NHL Looking to Purchase Bally Sports Regional Sports Networks
After soft-launching its direct-to-consumer streaming service in June, Sinclair Broadcast Group’s (SBG) Bally Sports networks are set to roll out their full in-market sports streamer on Monday, Sept. 26. However, the New York Post is reporting that the broadcaster might already be looking for an exit from the regional sports networks (RSNs) altogether.
On Tuesday, the Post reported that the three major sports leagues whose games are at the center of Bally Sports programming — Major League Baseball, the NBA, and the NHL — are expected to begin negotiations with Diamond Sports, the sports vertical owned by SBG. Despite the fact that Diamond reported last month that the streamer had retained 74% of the customers who had signed up for a seven-day trial during the soft launch, no hard subscriber numbers were given at the time.
Now the Post is reporting that the Diamond Sports business is “hemorrhaging cash and could be headed for a possible bankruptcy filing if it doesn’t find a white knight in the coming months,” according to sources.
At the time of its soft launch earlier this summer, the streamer focused on the markets of the five baseball teams for which it owns streaming rights — the Detroit Tigers, Milwaukee Brewers, Miami Marlins, Kansas City Royals, and Tampa Bay Rays. When the service launches wide next week, it will expand to the markets housing the 16 NBA teams and 12 NHL teams that Sinclair has streaming rights for.
Reports earlier this year indicated that MLB could launch its own in-market streaming option as early as 2023 to go along with its industry-leading MLB.TV out-of-market plan, and to date, Bally Sports has been unable to add any other baseball teams to its streaming rights package, something that is considered vital to being able to sustain a successful, year-round sports broadcasting business.
The Post reports that MLB has been asking SBG to pay extra fees for the streaming rights to the nine teams that Diamond owns the broadcast rights for. Sinclair believes that those rights are already a part of its deals with the teams.
Sources tell the Post that Diamond Sports could get up to $3 billion for the RSNs — both streaming and on cable — which would include the company’s debt. Sinclair purchased the former Fox Sports channels in 2019 from 21st Century Fox following Disney’s acquisition of most of the rest of the company’s assets. Sinclair paid $10.6 billion for the exclusive rights to broadcast games for a combined 42 MLB, NHL, and NBA teams. At the time MLB had been a part of a group that tried to purchase the RSNs, but was ultimately unsuccessful.
The Post’s sources believe that Sinclair would give control of the company over to creditors who would then sell Diamond to the leagues. If this “grand solution” doesn’t come to fruition, the current belief is that the company’s creditors could force Diamond Sports to declare bankruptcy in the next three to six months, despite the fact that the company reportedly has enough cash on hand to last at least another year.
The report claims that Diamond has been telling the leagues that if it does go bankrupt it will keep airing games, but will not pay the teams the previously agreed upon rights deals, as it will have the courts’ protection from creditors. It would then look to renegotiate more beneficial financial arrangements for the broadcast rights. Teams in the three leagues in question can make up to one-third of their revenue from TV deals, so any decrease in rights fees could have a substantial impact on the clubs’ businesses — and in the case of NBA and NHL, the league’s salary cap.
With the cable industry continuing to decline and the roll-out of Bally Sports+ being less than smooth, the foray into regional sports networks has not gone according to plan for Sinclair Broadcast Group. However, if the company can get out from under its reported $8.5 billion in debt and the three leagues can regain a portion of their team’s broadcast rights to then sell to the highest bidder, the situation could end up being a win-win for everyone involved.
Bally Sports+
Bally Sports+ is a direct-to-consumer streaming service that offers live games for those who want access to your local Bally Sports RSN without subscribing to a cable or satellite package.