Diamond Sports Group, a subsidiary of Sinclair Broadcast Group, has been neglecting to pay select regional media rights fees as it restructures its debt under Chapter 11 bankruptcy. Local broadcasts for the San Diego Padres, for example, were recently moved off of Bally Sports San Diego after the company failed to fulfill its payment to the team after a grace period. Major League Baseball created and bolstered a local media department led by executive vice president Billy Chambers, entering the season prepared to take over the production and dissemination of regional games at a moment’s notice.
Teams that could be potentially affected by the company failing to pay its rights fees this year included the Cleveland Guardians, Texas Rangers and Arizona Diamondbacks, the latter of which Diamond Sports aspires to drop. Diamond Sports Group has made its payment to the Texas Rangers, while the Diamondbacks are set to engage in a hearing with the company on July 17.
The Minnesota Twins, however, will have their games broadcast on Bally Sports North for the remainder of the 2023 regular season. A source with knowledge of the network’s plans revealed that Diamond Sports Group has made its payment to the team ahead of the deadline, according to the Star Tribune. The local media rights fee for the team is $54.8 million this year, which was agreed to over a decade ago; however, the contract ends following the conclusion of the regular season. Because of a preponderance of consumers considering or following through with cord-cutting, the deal is losing the company money, but it still hopes to ink a new contract with the team next year.
Additionally, Diamond Sports Group has made its rights payment to the Cleveland Guardians, according to a report from Crain’s Cleveland Business. The Guardians’ contract with the company does not expire until 2027, keeping them on Bally Sports Great Lakes for the foreseeable future. Diamond Sports Group is currently responsible for the regional sports broadcasts for 13 Major League Baseball teams.
Diamond Sports Group has long coveted direct-to-consumer (DTC) broadcast rights in order to bolster its streaming platform, Bally Sports Plus. In a contentious meeting between Major League Baseball Commissioner Robert D. Manfred Jr. and Sinclair Broadcast Group President and Chief Executive Officer Chris Ripley, the company requested the league grant it the DTC rights. When Manfred vehemently declined, Ripley outlined his plan to declare bankruptcy and begin declining to pay media rights deals. Without this revenue stream, Manfred and the league office knew the competitive integrity of the sport could be compromised, catalyzing it to take action.
In a recent bankruptcy court hearing between the two sides, Judge Christopher Lopez ruled that Diamond Sports Group must fulfill its agreements and pay the full amount of money owed to its rightsholders or relinquish the media rights entirely. Lawyers for Diamond Sports Group had argued that the fees should be renegotiated due to changing market conditions in the modern media ecosystem. Forty teams from Major League Baseball, the National Basketball Association and National Hockey League will remain under contract with the company should it be granted a form of egress from the Diamondbacks contract.
