MLB Broadcasting Rights : What does Bally Sports-Diamond Sports Group’s bankruptcy mean for MLB?

Major League Baseball (MLB)is getting ready for a big change that might be coming to the way it distributes media and put an end to blackouts on its streaming service.

MLB commissioner Roger Manfred clarified the league’s response in the event that Diamond Sports Group, the owner of 19 regional sports networks with the Bally Sports logo, 14 of which carry local MLB games, defaults on payments and goes for bankruptcy.

The clubs will move to terminate such contracts because “under every single one of the broadcast agreements, there provides a termination right,” Manfred said.

In that case, MLB would host the broadcasts of those clubs on its MLB Network cable channel and bargain a fee with providers of cable service like Comcast and Charter Communications.

The great majority of MLB games are broadcast on television through a regional sports network (RSN) system. In contrast to the NFL, which has broadcasting rights with five firms (Fox, CBS, NBC, ESPN/ABC, and Amazon Prime), broadcasting rights are handled locally in this case.

As a result, baseball teams must coordinate with regional broadcasters to air games. Certain major-market clubs have their own network for broadcasting, including the Red Sox, Yankees, Cubs, and Mets. Others collaborate with local publications.

Bally Sports, once owned by Fox Sports and now controlled by Diamond Sports Group, a division of broadcast TV juggernaut Sinclair, is the most popular broadcast partner. Bally Sports broadcasts for 14 MLB clubs.

MLB would push for “flexibility on the digital side” during those talks so that viewers may access local games on MLB.TV. Because RSNs had exclusive rights in the past, viewers were unable to watch games in their neighbourhood.

Final Dance? The issues at Diamond Sports Group might be the beginning of RSN’s problems.
Manfred admitted that the short-term income reduction for the impacted teams will result from the league’s contingency plans.

As many clubs still owe Diamond money until March 30th, when Opening Day falls, the situation could be resolved in the upcoming weeks.

Diamond said on Wednesday that it will be unable to make a $140 million interest payment on its $9 billion in debt. This will start a 30-day grace period during which Diamond will talk to its creditors.

What to know about MLB streaming rights?

Another perplexing aspect of MLB is how streaming rights diminish its circulation even further.

MLB nationwide broadcast a few games last season on Peacock and Apple TV+. Teams are blacked out locally if they are competing on any of those platforms.

The ambiguity is exacerbated by individual rights. Last season, the Yankees, for instance, played 21 games on Amazon, which frequently clashed with Apple. New York continued to compete in MLB. Under that situation, streamers were compelled to watch TV on Amazon Prime in the New York area.

Bally Sports+ cost $189 for the year and $19.99 per month in 2022, and the majority of RSNs require cable logins to access. What will happen to subscribers is still unknown.

The overarching point Manfred seemed to be trying to convey was that fans should still have access to their local teams throughout the 2023 season, one way or another. But the means of which fans will watch depends on the next 30 days with DSG.

What is Diamond Sports Group?

The regional Bally Sports networks’ operating arm, Diamond Sports Group, which is owned by Sinclair and has the broadcasting rights to 14 teams, is by far the greatest holding under one corporate banner. NBC Sports and AT&T each have four, which is the second-highest total.

The teams currently broadcasting under the Bally banner are:

  • Arizona Diamondbacks
  • Atlanta Braves
  • Cincinnati Reds
  • Cleveland Guardians
  • Detroit Tigers
  • Kansas City Royals
  • Los Angeles Angels
  • Miami Marlins
  • Milwaukee Brewers
  • Minnesota Twins
  • St. Louis Cardinals
  • San Diego Padres
  • Tampa Bay Rays
  • Texas Rangers

Diamond Sports Group is currently in a 30-day grace period after failing to make a $140 million interest-only payout on Wednesday. After that time, if DSG still hasn’t paid, it would apply for Chapter 11 bankruptcy. In addition, if DSG fails to make a payment, teams may sell the broadcasting rights.

Once Disney was compelled to sell following its merger of Fox for antitrust grounds, Sinclair bought Diamond Sports Group.

According to ESPN, Diamond Sports Group (DSG) said in its statement on Wednesday that it “intends to use the 30-day grace period to continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future.”

What does Diamond Sports Group’s failed payment mean for MLB?

Because of DSG’s financial troubles, MLB may pick up broadcasting rights in the short term, but it would be unlikely to be permanent.

“In the event that MLB stepped in, what we would do is we would produce the games,” commissioner Rob Manfred told reporters, per ESPN. “We would make use of our asset, the MLB Network, to do that. We would go directly to distributors — meaning Comcast, Charter, the big distributors — and make an agreement to have those games distributed on cable networks. My expectations is that as part of the negotiation, there would be a negotiation over price. And that probably gets back to the question about, you know, what the economics would look like, but we would also be seeking flexibility on the digital side.”

Manfred did, however, make it clear he wants to continue to work with DSG and Bally.

“Obviously, we want all of our broadcast partners to be successful,” he said. “We don’t want them to have financial difficulties, and we have been spending a lot of time and effort trying to work with them, figure out where they are. Obviously, our first choice would be that Diamond pay the clubs what they’re contractually obligated to pay them, but because I guess I’m a contingency planner by nature, we are prepared no matter what happens with respect to Diamond to make sure that games are available to fans in their local markets.

“We think it will be both linear in the traditional cable bundle and digitally on our own platforms, but that remains to be seen. As I said, our first hope is that Diamond figures out a way to pay the clubs and broadcast the games like they’re contractually obligated to do.”

What teams can be affected by Warner Brothers Discovery pulling out of RSNs?

Since it shorted the teams it does business with through AT&T SportsNet, Warner Bros Discovery also appears to be considering quitting the RSN contest.

The Pirates, Astros, and Rockies are those clubs. According to Forbes, Warner Bros Discovery formally announced their departure from the model on Friday.

In order to reclaim their rights before the RSNs enter Chapter 7 bankruptcy, teams now have until March 31.

The Mariners won’t be impacted despite Warner Bros Discovery owning a small portion in ROOT Sports Northwest.

Why do MLB games get cancelled?

MLB.TV, the league’s streaming service, is a good value. The cost to watch any game at any time is $150 for a full year.

The issue is that it has a significant drawback: Local cord-cutters can’t use it. Because regional networks seek exclusive broadcasting rights to games, local fans cannot watch their teams on MLB.tv.

The RSN structure has made it necessary for MLB fans to put up with geographic blackouts. MLB fans use MLB because MLB broadcasting partners want exclusivity. Market games cannot be viewed on TV. Both networks and stadium attendance are rewarded, although the regional restrictions are questionable: For example, it is a well-known fact that Cubs, White Sox, and  Cardinals, Royals, Brewers and Twins games.

Also confusing are tentpole events, such as the All-Star Game or the postseason. Because of MLB’s rights with ESPN, TBS, and Fox, those games may also be subject to blackout on MLB.TV. So in essence, MLB.TV is great for out-of-market fans. But it is specifically designed to ensure in-market fans must stick with cable.

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