MLB Would Prefer Regional Sports Networks Deliver on Deals; Preparing for Bally Sports Bankruptcy
As Diamond Sports, the parent company of Bally Sports, which owns the local broadcasting rights for dozens of professional sports teams, hurtles towards potential bankruptcy, the future of regional sports networks (RSNs) is currently up in the air.
Bally Sports currently has the local broadcasting rights for 14 of Major League Baseball’s 30 franchises — including five teams for which it owns the streaming rights as well. However, MLB appears to be increasingly making moves to either take back or take over those rights, should they become available due to bankruptcy complications.
While reports last year indicated that theNBA, NHL, and MLB were in discussions to purchase the Bally Sports networks from Diamond’s parent company Sinclair Broadcast Group (SBG), that never came to pass. However, MLB did hire a former Sinclair executive to potentially end its relationship with RSNs altogether.
Recently, MLB's chief revenue officer Noah Garden told Front Office Sports that while the league would like to see Bally Sports be able to continue to deliver on its contractual obligations to the 14 clubs that it works with, MLB is preparing to step in if that becomes necessary.
“Our strong preference would be for the RSNs to be able to fulfill the agreements they signed with the clubs. However, we need to be prepared if the RSNs are unable to do so,” Garden said “This is a situation we have been monitoring for a long time. We have been contingency planning to ensure that no matter what happens with the RSNs, fans will be able to continue watching their favorite teams in their local market.”
The current deals between the RSNs and Major League Baseball are quite lucrative for the league, with Diamond paying $1.47 billion in sports rights fees in just the first nine months of 2022. If Diamond files for bankruptcy, some believe the company could be protected from non-payment on the deal, leaving MLB without that substantial revenue stream, although the league will have a chance to renegotiate those deals if that happens. Additionally, the bankruptcy could leave 14 MLB teams without local broadcasts, something that would dramatically impact viewership numbers for those teams. For all of these reasons, MLB needs to take steps to prepare for the possible disaster.
One step being taken is the formation of an economic study committee, which will gather at the owners’ meetings in Palm Beach, Fla. next week. According to the Associated Press, the committee, which will include Los Angeles Dodgers chairman Mark Walter and Detroit Tigers chairman Chris Ilitch, will discuss possible courses of action if Diamond Sports chooses not to pay their sports rights fees.
Additionally, the league’s recent hiring of former Sinclair Broadcast Group executive Billy Chambers as Vice President of Local Media could be indicative of the league’s path forward as far as local broadcasting goes. This hiring comes among rumors of MLB planning to create a national direct-to-consumer (DTC) product, that would combine its existing out-of-market streaming product MLB.tv with in-market rights as well, effectively removing the need for deals with RSNs.
As it appears that the MLB is preparing for a future without Diamond Sports one way or another, we could be on the verge of a new era of local market sports broadcasting. And while it will take some work, and possibly a shaky adjustment period, for MLB to shift from the current RSNs to a more universal DTC product, could lead to substantial benefits for consumers. If a shift away from RSNs makes it easier for fans to watch games and doesn’t require them to subscribe to a cable, satellite, or live TV streaming service, this whole disaster could turn out to be a boon to the consumer.
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.