Diamond Sports Group, the corporation that owns 14 Bally Sports regional sports networks, is expected to file for bankruptcy March 17, according to a report from Josh Kosman of The New York Post. The timeline will be awkward for Major League Baseball since the 2023 season opens on March 30, but the league plans to step in and broadcast the games themselves.
It had been reported for some time that Diamond is in financial trouble and they forewent interest payments worth roughly $140MM to creditors last month. MLB Commissioner Rob Manfred said at that time that the league was monitoring the situation, hoping that Diamond would make its payments but also drawing up contingency plans. It was subsequently reported that the league had hired multiple former RSN executives for a newly-created Local Media department, seemingly to get in position to take over broadcasting duties where necessary.
The problem stems from continued cord-cutting as fewer customers are paying for cable bundles these days, opting instead to use streaming services. That leads to decreased revenue from ad sales and cable contracts, creating situations where RSNs are paying teams more for rights fees than they are able to make back from those revenue streams. Per Kosman’s report, there are at least four teams where Diamond plans to reject the contracts via the bankruptcy proceedings. The teams in question are the Reds, Diamondbacks, Guardians and Padres, with the San Diego deal currently $20MM in the red on an annual basis.
The report goes on to state that MLB’s plan is to take over the local TV broadcasts of those teams, as well as streaming them for free in those local markets as they negotiate lower deals with cable companies. It’s not yet clear if fans in blacked-out markets would be able to access those streams in the short-term. If deals are reached, the league plans to offer over-the-top service for around $15 per month. As Kosman notes, that’s lower than some other streaming deals, with the Red Sox charging $29.99 per month. The league also already tried to acquire the rights to all 14 teams currently controlled by Diamond but were turned down. Those clubs are the Angels, Braves, Brewers, Cardinals, Diamondbacks, Guardians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins.
A similar situation has arisen with Warner Bros. Discovery, which owns AT&T SportsNet and is a minority owner of Root Sports. It was reported last month that Warner was planning to get out…
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