It is widely assumed that Diamond Sports Group will be filing for bankruptcy after the company missed a payment to its largest creditor last week. The company owns the 19 Bally Sports regional sports networks. Those networks control the local broadcast rights for 14 Major League Baseball teams.
As a result of the speculation, Major League Baseball has formed an economic reform committee. It is charged with assessing the long-term financial health of baseball.
Commissioner Rob Manfred says that it may behoove the league not to rely on teams’ local media rights deals so heavily.
“We’ve got to find a new model,” he said to The Athletic. “Maybe we ought to be driving the boat, what that model looks like.”
Major League Baseball has been dealing with major revenue and spending disparities between its teams for years. Some team owners have favored implementing a salary cap for a while. Short of that, Manfred believes rethinking broadcasting contracts could be part of the solution.
“We have businesses that are literally not similar in terms of the overall revenue that they’re generating,” he said. “And to the extent that you could find a new distribution model that actually helped on that disparity side, that would be the daily double. So people are having conversations that haven’t been had in baseball, and it’s really been owners talking to owners, which is a good thing.”
Manfred said that the committee was not created specifically to address what may or may not happen with the Bally Sports networks, but it was a significant motivation. It is made up of team owners.
