MLB Files Emergency Motion to Force Diamond Sports to Pay Fees or Surrender Broadcast Rights to Guardians, Twins
Diamond Sports Group’s twisted path through bankruptcy court took another turn this week. The company —which owns and operates the collection of 19 regional sports networks (RSNs) under the Bally Sports brand— is now dealing with an emergency motion from Major League Baseball that could force it to surrender two of its baseball contracts, according to The Athletic.
Those contracts cover the broadcast rights to the Cleveland Guardians and Minnesota Twins. Currently, those teams games are still being broadcast on Bally Sports Great Lakes and Bally Sports North respectively, despite the fact that DSG has not paid them what the teams contractually owed to show the games.
MLB’s filing is seeking an order by April 13 which would force Diamond to either fork over its obligated payments, or terminate those contracts, which would allow the clubs themselves to take over broadcasting duties with assistance from the league. Diamond’s final payment to the Guardians is officially due on Saturday, April 8, and missing it would kick off a 10-day grace period built into the contract language. But judging from the language used in the filing, MLB is out of patience.
“Just one day prior to the April 1 due date for the first 2023 installment of the fees due to the Clubs, the Debtor RSNs informed the Guardians and the Twins that the [Bally Sports] RSNs would not be making the required payments,” the motion reads. “The [Bally Sports] RSNs made this decision even though they continue to use the Clubs’ valuable intellectual property every day. By continuing to broadcast Guardians and Twins games, they generate postpetition revenue, yet boldly refuse to pay the Clubs.”
The judge in the case may decide to give DSG the full 10 days after April 8 guaranteed to it by its contract with the league, or they may simply decide to grant MLB’s motion and force Diamond’s hand. Sources have said that DSG is unlikely to make its payment to the Guardians on time, though it was able to hand over a similar last-minute installment to the San Diego Padres last week, ensuring the company will legally be able to broadcast that team’s games for the rest of the season.
The Arizona Diamondbacks, Detroit Tigers, Milwaukee Brewers, Tampa Bay Rays and Texas Rangers noted in the motion that they could join it later if DSG doesn’t make its obligated payments to them in the future. MLB commissioner Rob Manfred has stated in the past that the league is fully prepared to take over broadcasting duties from Bally Sports, and it could use MLB Network and its out-of-market streaming platform MLB.TV to ensure no broadcasts are missed.
MLB has not shown anywhere near the kind of willingness to work with DSG that the NBA and NHL have demonstrated. The league clearly thinks that RSNs operate under a broken model that is no longer in the best interest of its teams, and will act accordingly to do whatever it can to get their broadcast rights back.
The issues between MLB and DSG have not, thus far, led to any disruption in broadcasts. In fact, the league saw record viewership numbers for MLB.TV on Opening Day, compiling a total of 172 million minutes streamed on that service. MLB’s digital and cable platforms might see an even bigger flood of new users this year if it manages to reclaim any broadcast rights from Diamond Sports Group.
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