A contentious bankruptcy hearing between Major League Baseball (MLB) and Diamond Sports Group (DSG) was carried out after Sinclair Broadcast Group David Smith started to refuse to pay the full value of television rights contracts for various teams without direct-to-consumer additions in an effort to eliminate nearly $8 billion in debt.
In the end, a judge mandated Diamond Sports Group pay the teams afflicted – the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers – the full value of their contracts. Furthermore, Major League Baseball stated that it would be ready to broadcast games at the local level, evinced by the creation of a local media department led by executive vice president and RSN veteran Billy Chambers.
Diamond Sports Group is attempting to nullify the broadcast contract of the Arizona Diamondbacks. The next payment due to the team in its regional sports network deal, which expires in 2035, is on July 1 and is said to cost debtors significant amounts of money.
As a result, lawyers for Diamond Sports Group filed an emergency motion to the Houston bankruptcy judge to void the company’s agreement with the Diamondbacks. If the judge grants the company’s request, it would leave the Arizona Coyotes as the only team with local games televised on Bally Sports Arizona, as the Phoenix Suns intend to broadcast games for free over-the-air and streaming through direct-to-consumer service. That move was blocked by the same bankruptcy judge, Chris Lopez, but is expected to move forward despite a potential request for damages to take place at a later hearing.
“The current costs associated with performing under the Diamondbacks agreement outweigh the revenues the debtors are able to obtain through broadcasting Diamondbacks games,” Diamond Sports Group wrote in a court filing. “As such, the debtors have concluded that the Diamondbacks agreement does not fit within the debtors’ long-term strategic plan and therefore is not necessary to the debtors’ business.”
If Diamond Sports Group is bestowed the ability to tear up the Diamondbacks contract, 40 teams from Major League Baseball, the National Basketball Association and the National Hockey League will remain under contract. The deal allowing Diamond Sports Group to stream NBA games expires at the end of the 2024-25 regular season, the same year in which the national media rights deals expire. The San Diego Padres were the first team to exit its deal with Diamond Sports Group after the company chose not to make a media rights payment after a grace period, and now has its local games produced by Major League Baseball.
