Diamond Sports Prepared to Surrender MLB Contracts if it Can’t Pay; Misses Payment to Padres
Things have been quiet for a few weeks on the Diamond Sports Group (DSG) bankruptcy proceedings front. The relative calm was upset this week, as John Ourand of the Sports Business Journal reported on Monday that the MLB’s San Diego Padres are the latest team not to receive a scheduled rights payment from DSG.
The Padres join Arizona Diamondbacks, Cleveland Guardians, Texas Rangers, Cincinnati Reds, and Minnesota Twins as teams that have aired their games on Bally Sports regional sports networks (RSNs), but have not been paid the full amount by DSG on time. A hearing has been set for May 31 so the judge in the case can rule on what the fair market value of the deals between those teams and DSG is, but Ourand’s reporting indicates that there may finally be a little willingness on Diamond’s part to relinquish some of the rights it holds.
There is a good chance that the company does not make its payment to the Padres by the end of the grace period on May 30. DSG’s deal with the club costs Diamond money, and the Padres are one of the nine teams that the company owns the broadcast rights to, but not the streaming rights. Negotiations for streaming rights between DSG and those nine clubs have not been productive, which has pushed Diamond closer to simply walking away from every MLB deal that it does not make a profit from.
Diamond has promised the league that if it gets the streaming rights to those nine teams, it will pay the full amount of its rights deals to each team for the entire length of their contracts. But from MLB’s point of view, Diamond is contractually obligated to do that anyway, and all rhetoric from the league’s side has made it clear it wants to be finished doing business with DSG as quickly as possible.
Earlier this month, it seemed that the Cincinnati Reds would be the first team to leave a Bally Sports RSN and start broadcasting its own games. But an eleventh-hour payment from DSG dashed the league’s hopes that it would be able to reclaim the Reds’ broadcasting rights, and Diamond has continued to make such last-minute payments to other teams in the hopes of convincing them to sell the company their streaming rights.
DSG hasn’t been willing to give up on teams from other leagues, either. The NBA’s Phoenix Suns and WNBA’s Phoenix Mercury attempted to leave Bally Sports Arizona in favor of a local broadcasting deal in early May, but Diamond’s bankruptcy judge blocked those efforts on grounds that all of the company’s broadcasting deals were essentially frozen in place when it was granted Chapter 11 protections.
For now, it seems that Bally Sports+ won’t be getting a big influx of new MLB teams any time soon. But because of that stalemate, Diamond Sports Group might finally be convinced to give up some of the MLB rights that it holds, especially if they cover teams that cost DSG money instead of netting a profit.
Bally Sports+
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