The Ohio Cup trophy sits above the Bally Sports logo before the game between the Cincinnati Reds and the Cleveland Guardians at Progressive Field on May 17, 2022 in Cleveland, Ohio.
George Cubas | Diamond Pictures | Getty Images
This week, a bankruptcy judge ordered Diamond Sports, owner of the regional sports network, to pay four Major League Baseball teams full media rights fees.
Diamond, which operates a portfolio of 19 networks under the Bally Sports brand, filed for bankruptcy in March, seeking not only to restructure its debt load but also to reset some media rights deals with teams to reflect what it says are market rates. Rampant cord-cutting.
The company has been seeking to reduce payments owed to four MLB teams — the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins — leading to bankruptcy court this week. Go head-to-head with MLB officials. Diamond has paid the team 75 percent of what was owed in the early days of bankruptcy, court documents show.
The judge ruled that the teams could be released from their contracts with the company if Diamond did not pay the remaining amounts owed to the teams.
The decision came after the MLB announced earlier this week that it would begin producing and distributing San Diego Padres games through pay-TV bundles and its MLB.TV streaming service after Diamond stopped paying the Padres . What happened in court did not affect the Priest’s case.
“Major League appreciates the Houston federal bankruptcy court’s decision requiring Diamond to pay the club the full rate of his contract,” an MLB spokesman said in a statement Friday. “As always, we expect Diamond to continue to broadcast games and Meet its contractual obligations to the club. Like the Padres, MLB stands ready to provide fans with games should Diamond fail to meet his obligations.”
The judge’s ruling came after two days of hearings that included testimony from MLB Commissioner Rob Manfred and showcased the strained relationship between the league and Diamond Sports.
A spokesman for Diamond said in a statement Friday that following the bankruptcy judge’s order, “we look forward to working with Major League Baseball and our team partners on a forward right that applies to all parties and positions Diamond long-term. The plan was successfully negotiated.”
In particular, Diamond has been pushing hard to secure direct-to-consumer streaming rights for all the MLB teams that play on its network. Diamond currently has streaming rights agreements with all of its NBA and NHL teams, as well as a handful of MLB teams.
Regional sports network businesses are under pressure as more consumers cut back on traditional pay-TV packages in favor of streaming services. Last year, Diamond launched a streaming response through Bally Sports+.
Diamond pays 42 teams in the MLB, NBA and NHL to broadcast most of their local games in their markets.
During the hearing, a Diamond executive said Bally Sports+ had 203,00 subscribers, 55% of the company’s subscriber goal for The Athletic Report.
Diamond also faces a debt load of more than $8 billion due to Sinclair Broadcasting GroupThe networks were acquired in 2019 for $10.6 billion.
Diamond is now an unconsolidated, independently operating subsidiary of Sinclair.