After Major League Baseball told a bankruptcy court that it wanted a resolution on the status of local rights under contract with Bally Sports-branded regional sports networks under ownership of Diamond Sports Group, there seems to be more information on the forthcoming situation. Coinciding with the retirement of longtime television play-by-play voice Dick Bremer, the company’s contract with the Minnesota Twins on Bally Sports North has expired.
The company paid the team $54.8 million according to a court document filed by Diamond Sports Group, and there was no mention of a potential renewal. If the company does not reach a deal to renew play-by-play rights, it would mark the third Major League Baseball team whose regional broadcasting rights have been dropped in the last year.
Diamond Sports Group is in the midst of negotiating restructured contracts with its local teams. Earlier this week, it reached an agreement with the NBA that involves a reduction in rights payment in exchange for the rights to revert back to teams upon the end of the season. The move comes ahead of the expiration of the league’s media rights deal at the end of the 2024-25 regular season, which could precipitate exploring new ways to reimagine regional broadcast rights distribution.
As the company works through a recently extended exclusivity period that lasts until January 29, 2024 to file a restructuring plan to attempt to emerge from Ch. 11 bankruptcy rather than liquidate its business, it pointed to significant progress over the last 60 days with its debtors.
The filings revealed that under the transition plan it has deliberated, Diamond Sports Group will continue to operate and broadcast content through the conclusion of the 2023-24 NBA and NHL seasons, along with the 2024 MLB season. MLB filed a rejection to the motion to extend the exclusivity period, something Diamond asserts will not prejudice the league or its member clubs and should alleviate any concerns regarding the ongoing circumstances.
Diamond Sports Group also stated that it will either reject or otherwise agree to terminate telecast rights agreements by Dec. 31, 2023 if it is unable to reach a deal with MLB. The debtors have shared the identities of the clubs it will continue broadcasting next season, along with those who could potentially be rejected or terminated by the end of the year.
“These actions give MLB and its clubs the clarity they demand in their Objection concerning the future treatment of their telecast rights agreements and give them time to transition to another broadcast partner before the start of the 2025 MLB season,” Diamond Sports Group said in the filing. “These actions will also minimize the risk of disruption to fans as the Debtors expect to continue broadcasting through the 2024 MLB season.”
During the 2023 MLB regular season, Diamond Sports Group rejected the broadcasting contract of the San Diego Padres. As a result, MLB utilized its newly created local media department to effectuate the production and dissemination of game broadcasts. Moreover, the league paid the Padres at least 80% of the remuneration originally included in the contract with Diamond. Shortly thereafter, the Arizona Diamondbacks, who went on to win the National League championship, also lost their broadcast home with Bally Sports Arizona. In a similar manner, the league stepped in and provided local broadcasts that had multiple functionalities for fans, including a direct-to-consumer option.
Last week, the Twins emphasized that the club is exploring alternate broadcast options as the marketplace shifts and the future becomes more ambiguous. The absence of a television contract heading into next season, along with pushing the payroll in several years, has led to Twins general manager Derek Falvey stating that he expects the payroll to decline for next year’s team.
“The Movants have asked for clarity on the 2024 MLB season. Now they have it,” stated the Ad Hoc First Lien Group of Diamond Sports Group in a subsequent court filing. “As outlined in the Debtors’ Objection, the Debtors have already communicated to MLB which Clubs’ games they intend to continue broadcasting for the 2024 season and which other agreements may be rejected or terminated in advance of the 2024 season (absent agreed upon modifications).
“Pending approval of the various settlements and entry of the orders contemplated by the Cooperation Agreement, the Clubs can begin preparing for the upcoming season with an understanding of which Clubs the Debtors intend to broadcast games for and which Clubs may have to find alternatives.”
