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The Ohio Cup atop the Bally Sports logo prior to a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
George Cubas | diamond pictures | Getty Images
A bankruptcy judge ordered Diamond Sports, owner of Regional Sports Networks, this week to make full media rights payments to four Major League Baseball teams.
Diamond, which operates a 19-network portfolio under the Bally Sports brand, filed for bankruptcy in March, not only restructuring its debt burden, but also resetting some media rights deals with the teams to reflect so-called market pricing in the aftermath of the cord-cutting outbreak.
The company has been looking to reduce payments owed to four MLB teams — the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins — that landed it with MLB officials in bankruptcy court this week. Court papers showed that Diamond had already paid teams up to 75% of payments owed earlier in its bankruptcy.
A judge ruled that if Diamond did not make the remainder of the payments owed to the teams, those teams could walk away from their contracts with the company.
The decision comes after MLB announced earlier this week that it would begin producing and distributing San Diego Padres games on pay-TV packages and its MLB.TV streaming service after Diamond stopped making payments to the team. The order in court did not affect the Padres’ status.
“MLB appreciates the ruling by the Federal Bankruptcy Court in Houston requiring Diamond to pay the clubs full contractual price,” an MLB spokesperson said in a statement on Friday. “As always, we hope Diamond will continue to broadcast games and meet its contractual obligations to the clubs. As with the Padres, MLB will be ready to make games available to fans if Diamond fails to live up to its obligations.”
The judge’s ruling came after a two-day hearing that included testimony from MLB Commissioner Rob Manfred and showed tensions between the league and Diamond Sports.
A Diamond spokesperson said in a statement Friday that, in line with the bankruptcy judge’s orders, “We look forward to engaging with MLB and our team partners to negotiate a moving rights package that works for all parties and positions Diamond to achieve long-term success.”
In particular, Diamond has been pushing to retain direct-to-consumer broadcast rights for all MLB teams that broadcast on its networks. Currently, Diamond handles all NBA and NHL teams, as well as a few MLB teams for broadcast rights.
The prevalence of consumers cutting their traditional pay-TV packages in favor of streaming services has affected the regional sports network’s business. Last year, Diamond launched its streaming response with Bally Sports+.
Diamond pays 42 teams across the MLB, NBA and NHL to broadcast the bulk of the local games in their markets.
During the hearing, a Diamond executive said Bally Sports+ has 203,00 subscribers, which is 55% of the subscriber target for the company, The Athletic. mentioned.
Diamond also faces a debt load of more than $8 billion, stemming from Sinclair Broadcast Group$10.6 billion acquisition of regional sports networks in 2019.
Diamond is now an unincorporated, independently operated subsidiary of Sinclair Corporation.
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