Alden GonzalezESPN Staff Writer2 Minute Read
Diamond Sports Group won’t be making its scheduled rights fee payment to the San Diego Padres by the end of its grace period on Tuesday, according to a statement from DSG, making the team’s game against the Miami Marlins that afternoon the final one under Bally Sports.
Moving forward, through the end of the regular season and perhaps in perpetuity, Major League Baseball is expected to assume control of the team’s broadcasts.
Diamond Sports Group, the Sinclair subsidiary that operates its broadcasts under the name Bally Sports, is navigating through bankruptcy proceedings in the wake of significant financial losses that were caused by the debt it incurred in the initial purchase and the accelerated rate of cord-cutting throughout the country. Diamond owns the regional sports networks for 42 teams across the NHL, NBA and MLB, the latter of which comprises 14 teams.
Teams who are not paid their rights fees are essentially free to break their contracts, and the Padres, who boast one of the most star-laden teams in the sport, are the first to fall out. Details of MLB’s plan are not yet known, but the league has previously planned to ensure that local fans don’t miss any of their teams’ games if they fall out from Diamond’s ownership.
In that event, MLB planned to make those teams’ games available through its MLB.TV app — with blackouts eliminated in those instances – and negotiate with broadcasting companies to air games on a different cable channel. The same broadcasters, camera operators, producers and others behind the scenes were expected to be retained on a freelance basis.
As part of a statement, a spokesperson for Diamond Sports Group wrote: “While DSG has significant liquidity and has been making rights payments to teams, the economics of the Padres’ contract were not aligned with market realities. MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts.”
A hearing is scheduled for Wednesday in Houston, during which a bankruptcy judge will preside over Diamond’s claims that it should essentially pay lesser rights fees to the Cincinnati Reds, Texas Rangers, Arizona Diamondbacks and Cleveland Guardians in order to account for market forces that have greatly diminished the traditional cable model in recent years. The judge’s ruling, which could come either Wednesday afternoon or Thursday morning, will play a big role in Diamond determining which other contracts it keeps or sheds as part of the bankruptcy process.
