In the latest developments with the ongoing Chapter 11 bankruptcy proceedings involving Diamond Sports Group, the parent company of the Bally Sports regional sports networks filed paperwork seeking to restructure the contracts with a few of the MLB teams they serve.
The Cleveland Guardians, the Minnesota Twins and the Arizona Diamondbacks would receive less than what Diamond Sports contractually owes. At the moment, Diamond Sports has ceased rights payments to all three teams but continues to broadcast their games.
“What is extraordinary is that the debtor RSNs now, for the first time … allege that they have some ‘right’ to pay less than the contract rate for those games,” attorneys for the league, the Twins and Guardians responded in a motion. “This is not the law.”
Since Diamond Sports decided to not pay the Diamondbacks prior to filing for bankruptcy, Arizona is in a different situation. The team has filed its own motion asking for full payment of what Diamond Sports owes or to terminate the contract.
The company’s argument in trying to pay less is that it’s possible to restructure the debts as part of the bankruptcy process. The league is calling the company’s bluff.
“Only after defaulting on their payment obligations do the debtors even raise the fanciful argument that they can choose to not pay the agreed upon contractual rate,” the league’s motion read. “The debtors are coming up with any and all reasons they can to delay such payment, including by asking the court to take the extraordinary measure of rewriting the terms of agreements that were freely negotiated and entered into.”
“Major League Baseball and its clubs are not going anywhere. Unfortunately, the same cannot be said for the debtors,” the league added.
Arguments in the case are scheduled to be heard on April 19, but the company is reportedly pushing to have the date pushed back into next month.
