This week, the Arizona Diamondbacks became the second team to have their broadcast rights acquired by Major League Baseball. Diamond Sports Group, the parent company of 19 Bally Sports channels including Bally Sports Arizona, failed to reach an agreement to continue paying the team as it is undergoing significant restructuring after filing for Chapter 11 bankruptcy protection in March. As soon as a bankruptcy court judge approved Diamond’s rejection of the Diamondbacks contract, the broadcast rights were immediately transferred to MLB.
Last month, Diamond Sports lost its bankruptcy court case against MLB in which it argued that the rights fees it owes clubs should be reduced due to changes in market dynamics in the era of cord-cutting and the decline of cable television. It had already missed payments to the Diamondbacks, Guardians, Rangers, and Twins earlier in the year, so the company was quickly put in a position to decide whether to keep or cut certain teams' broadcast rights.
The Diamondbacks join the Padres as the teams who’ve had their broadcasts shift from Bally Sports to MLB. Early returns from the Padres broadcasts have been mostly good as the audio/visual quality has been excellent and more importantly, more fans are able to watch their favorite team play.
MLB commissioner Rob Manfred has long stated that one of his top priorities is making games more accessible for all its fans to watch. The league has long dealt with issues pertaining to local blackouts, frustrating cord-cutters and others without access to cable television. However, the decline of regional sports networks like Bally Sports and AT&T Sports Net could serve as an opportunity for MLB to take more control of broadcasts across the league.
Over the offseason, Manfred hired an EVP of local media presumably to get ahead of the issues that have surfaced this year and beyond. MLB has reported that since taking over San Diego’s broadcasts, an additional 2 million people have access to Padres games. Furthermore, according to the league’s press release following acquiring Arizona’s rights, the availability of D-Backs games will jump from 930,000 households to 5.6 million households in the team’s home broadcast territory.
While the expanded reach is a big positive for the league and its teams, there is a downside. The rights fee regional sports networks pony up to their respective team is a major source of revenue that if lost, could have a significant effect on the bottom lines for MLB franchises. Yes, MLB does have a lucrative national TV deal and small market clubs do benefit from revenue sharing, but the decline of RSNs must at least pose some cause for concern moving forward. MLB has promised at least 80% of the money Diamond originally owed to the Padres and D-Backs. But 80% isn’t 100% and budgets that have been crafted years in advance will need to be adjusted.
It's worth noting that after opting against paying the Diamondbacks, it was reported by Front Office Sports that Diamond Sports Group “anticipates” continuing its relationship with the other 12 teams under its umbrella for the remainder of the 2023 season. What happens beyond 2023 is certainly up in the air at this moment, but if the reports are true, these 12 owners will at least rake in the money they originally expected from Diamond this year. As the trade deadline approaches, this source of revenue is obviously welcoming, especially for owners taking on additional salaries.
This will certainly not be the last story pertaining to MLB broadcasts. With the exception of big market clubs like the Yankees, Mets, Red Sox, Cubs, Dodgers, and Giants, who either own or receive massive payments from their respective regional sports networks, the overall decline of RSNs is something every other club is monitoring. Ideally, MLB would love to take control of all its teams' broadcast rights and offer in-market streaming to all fans. But that’s a lot easier said than done and there are many barriers standing in the way of Manfred and the league office at the moment.
Brendan Bell can be found on Twitter @_bbell5.
