The Ohio Cup Trophy on top of a Bally Sports logo prior to a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
George Kubas | Diamond Images | Getty Images
Diamond Sports, the owner of regional sports networks, was ordered this week by a bankruptcy judge to make full media rights payments to 4 Major League Baseball teams.
Diamond, which runs a portfolio of 19 networks under the Bally Sports brand, filed for bankruptcy in March, searching for to not only restructure its debt load, but in addition reset a few of its media rights deals with teams to reflect so-called market rates within the wake of rampant cord cutting.
The corporate had been trying to cut down the payments owed to 4 MLB teams — the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins — which caused it to go toe-to-toe with MLB officials in bankruptcy court this week. Diamond had already paid the teams as much as 75% of the payments owed earlier in its bankruptcy, court papers show.
If Diamond doesn’t make the rest of the payments owed to the teams, those teams can walk away from their contracts with the corporate, a judge ruled.
The choice comes after MLB earlier this week announced it could begin producing and distributing San Diego Padres games on pay-TV bundles and its MLB.TV streaming service after Diamond stopped making payments to the team. The in-court matter didn’t affect the status of the Padres situation.
“MLB appreciates the ruling from the Federal Bankruptcy Court in Houston requiring Diamond to pay the complete contractual rate to Clubs,” an MLB spokesperson said in an announcement Friday. “As all the time, we hope Diamond will proceed to broadcast games and meet its contractual obligations to Clubs. As with the Padres, MLB will stand able to make games available to fans if Diamond fails to fulfill its obligations.”
The judge’s ruling got here after a two-day hearing that included testimony from MLB Commissioner Rob Manfred and showcased the tensions between the league and Diamond Sports.
A Diamond spokesperson said in an announcement Friday that in step with the bankruptcy judge’s orders, “we stay up for engaging with MLB and our team partners to barter a go-forward rights package that works for all parties and positions Diamond for long-term success.”
Particularly, Diamond has been pushing to carry the direct-to-consumer streaming rights to all MLB teams that air on its networks. Currently, Diamond has deals with all its NBA and NHL teams, plus a handful of MLB teams for the streaming rights.
The proliferation of consumers cutting their traditional pay-TV bundles in favor of streaming services has weighed on the regional sports network business. Last 12 months, Diamond launched its streaming response with Bally Sports+.
Diamond pays fees to 42 teams across the MLB, NBA and NHL to broadcast the majority of the local games of their markets.
In the course of the hearing, a Diamond executive said Bally Sports+ had 203,00 subscribers, representing 55% of the subscriber goal for the corporate, The Athletic reported.
Diamond can also be facing a greater than $8 billion debt load, stemming from Sinclair Broadcast Group‘s $10.6 billion acquisition of regional sports networks in 2019.
Diamond is now an unconsolidated and independently run subsidiary of Sinclair.