With Spring Training on the horizon, many MLB clubs are looking to fortify their roster as we enter the last month of the offseason. While we've seen a few teams (Hello Dodgers) spend big on free agents and trade acquisitions, others have been reticent to hand out lucrative contracts due to uncertainty pertaining to their local television revenue.
In today's media environment, television networks have been facing an accelerated rate of cord-cutting in recent years as consumers opt for streaming services. Despite maintaining stable ratings, as live sports often do, regional sports networks (RSNs) have felt the brunt of the shift away from cable. Chief among these RSNs is Diamond Sports Group, the parent company of Bally Sports, who carries the rights to 37 sports teams across the NBA, NHL, and MLB. In March 2023, Diamond filed for Chapter 11 bankruptcy protection, casting doubt on the company's ability to broadcast games moving forward.
During the 2023 season, Diamond lost a bankruptcy court case to MLB in which it argued that the rights fees it owed clubs should’ve been reduced due to the change in market dynamics in the era of cord-cutting and decline of cable television. After previously skipping payments to a collection of MLB clubs, the company was forced to decide which contracts to keep or cut. As a result, broadcasts for both the San Diego Padres and Arizona Diamondbacks were turned over the league after Diamond failed to reach an agreement to continue paying the respective teams broadcast fees.
Heading into 2024, the expectation was that Diamond Sports’ long term future in broadcasting MLB games was highly in doubt. With the expectation it would be breaking up, Diamond had previously reached contingent arrangements with the NBA and the NHL to end its agreements with teams in each league after the 2023-24 season and was deep into negotiations with MLB over a similar arrangement.
However, there is a new development on that front. This week, Diamond Sports has arranged a $450 million plan with creditors that would allow it to continue operating beyond 2024, pending court approval. In addition, Diamond will also get funding from Amazon as part of a streaming deal. The plan also ends Diamond’s litigation against its parent company Sinclair, which will pay $495 million for the support.
MLB not coming to terms means, unlike with the NBA and NHL, there is no agreement to end their teams’ contracts at the end of the current season. Therefore, the 11 teams with Bally Sports deals will continue under the umbrella for linear past 2024 until the end of their contracts.
The 11 teams are as followed
· Atlanta Braves
· Cincinnati Reds
· Cleveland Guardians
· Detroit Tigers
· Los Angeles Angels
· Kansas City Royals
· Miami Marlins
· Milwaukee Brewers
· St. Louis Cardinals
· Tampa Bay Rays
· Texas Rangers
From reports, it appears nine of these teams (all the above besides Cleveland and Texas) will have their games broadcasted on Bally Sports in 2024. Importantly, five of the teams also have digital rights deals with Bally Sports, and those will be offered on Amazon Prime. Those five are the Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers and Tampa Bay Rays.
Nonetheless, this story is far from over. For the Rangers, Guardians , and Minnesota Twins (whos Ballys deal expired following the 2023 season), their status is still up in the air. A lawyer for Texas Rangers said the team is studying new bankruptcy exit plan and will provide a prompt response to Diamond Sports on whether it wants to engage in talks to reduce the rights fee or go out on its own. The Rangers sentiments are likely a reflection of MLB’s reaction to this week’s news.
The fact that many of these teams’ rights will likely stay on Bally Sports is disappointing news for MLB. I’ve written for Conduct Detrimental for a while now that one of MLB’s goals is to create more a national product that would address the local blackout problem through in-market streaming. MLB.tv is a great product that many leagues are envious of. However, without control of broadcast rights, many fans are “blacked out” from watching certain games.
The league undoubtedly wanted to take more control of these rights, and it appeared like Diamond Sports’ bankruptcy was an avenue to do that. With this news, that will be more difficult. All this came as a surprise," an MLB lawyer said of the news.
MLB and Diamond were discussing an arrangement for 2024 that would have revised rights fees for at least some teams, including the Texas Rangers, whom Diamond has threatened to drop even for this upcoming season. The arrangement under negotiation likely would have returned all MLB teams’ rights to them following the 2024 season.
But with Diamond appearing to carry forward beyond 2024, the tenor of any negotiations with MLB might now change. With all of this being new and somewhat unexpected, league executives and team officials are still trying to sort out what it all means and how to react.
With that being said, it will be interesting to watch this situation develop moving forward. The RSN issue not only on MLB, but all leagues as well certainly has large scale implications on team revenues and accessibility for fans. On the bright side, getting games on Amazon Prime might be beneficial for enhanced ‘reach’ into the streaming world. MLB already has a handful of Apple TV and Peacock exclusive national games already. In addition, Amazon already has a foot in the door in local baseball games through a small package of New York Yankees games exclusively in New York.
Nonetheless, the fact that only five of the teams also have digital rights deals with Bally Sports makes this far from a cure all. As mentioned before, this story is far from over and will likely have many twists and turns in the near future.
Brendan Bell is a 1L at Arizona State Law School and can be found on Twitter (X) @_bbell5
