MLB Commissioner: Sinclair Exec Threatened Bankruptcy to Try to Secure League Streaming Rights
MLB Commissioner: Sinclair Exec Threatened Bankruptcy to Try to Secure League Streaming Rights
Major League Baseball and Bally Sports’ parent company Diamond Sports Group (DSG) headed back to court this week for a scheduled emergency hearing. MLB will try to make its case that it deserves to reclaim the broadcasting rights to all 13 teams that Diamond currently holds, while Diamond will try to convince the judge those contracts are worth less now than they were when signed, and that it should only have to pay reduced broadcasting fees to the individual teams.
The hearing began on Wednesday and will conclude Thursday when Judge Christopher Lopez hands down his ruling. According to Front Office Sports, the biggest shock came when MLB commissioner Rob Manfred took the stand and claimed that before DSG headed to court to secure bankruptcy protections, he got a visit from David Smith, executive chairman of DSG parent company Sinclair Broadcasting Group. Smith wanted the streaming rights to all teams DSG held the broadcasting rights to, and allegedly told Manfred he’d put the company into bankruptcy if those rights were not sold.
Asked earlier in the day if DSG had attempted to blackmail MLB to get its streaming rights, Diamond CEO David Preschlack said “absolutely not.” But Manfred’s testimony is credible, considering that Diamond has been in pursuit of MLB's streaming rights for a long time. DSG holds the broadcasting rights to 13 MLB teams, but streaming rights to just five of those clubs.
Baseball executives have been adamant that they’ll never sell those rights to DSG voluntarily as it looks like MLB wants out of the regional sports network game altogether. The dream for Manfred is for his league to eventually set up its own streaming platform with every team in baseball on it, a platform that will not feature any in-market blackouts.
Such a service is likely still a ways off, however. The fight over whether it comes into existence at all will be an internal one, as bigger MLB teams know they’ll have an inordinate amount of leverage when determining the particulars of such a service. It’s essentially impossible for the league to put together a streaming platform that doesn’t have those teams on it, because as the executive of one such club told ESPN, “Without us, there’s nobody buying the package.”
MLB is focusing on one fight at a time, however, and it hasn’t come close to getting the satisfaction it wants from DSG. The league rejoiced as it took over broadcasting duties for the San Diego Padres this week, the first team on a Bally Sports RSN to be released from DSG’s grip. Others may follow, as Diamond has said it will surrender the rights to teams whose contracts it can’t reasonably make money off of.
Thursday’s court ruling will give clarity to an issue that has, thus far, been incredibly difficult to sort out. Given the way that things have played out so far, it seems unlikely that Judge Lopez will issue a ruling that will give MLB broadcasting rights to all of its teams. That means that while the case between Diamond and its creditors will have a clear path forward, its often-frosty relationship with MLB will continue, to the dismay of Manfred and his colleagues.
