By Phillip Swann
The TV Answer Man –@tvanswerman
Major League Baseball yesterday filed a motion in the Diamond Sports bankruptcy case saying that it does not oppose the RSN company’s request to end its broadcasting agreement with the Arizona Diamondbacks. Meanwhile, DIRECTV filed a different motion yesterday asking that it not have to pay for Diamond’s Bally Sports Arizona channel if the court approves the RSN company’s request.
The two motions come in response to Diamond Sports’ filing last month in bankruptcy court to reject the Diamondbacks deal. However, the company, which declared bankruptcy in March, and owns 18 Bally Sports regional sports networks, filed a later motion to postpone a hearing on the request. Diamond Sports said it was in ‘positive’ discussions with the team to continue broadcasting Arizona’s games.
“(Diamond Sports) and the Diamondbacks have been engaged in constructive discussions on potential consensual paths forward to resolve the motion. Accordingly, the parties agreed to adjourn the hearing on the
motion to allow these positive discussions to continue. If the parties are unable to reach a consensual solution, the Debtors (Diamond Sports) are prepared to proceed with the rejection motion, which remains pending as of the date of this motion,” Diamond Sports told the court this week.
The New York Post reported this week that MLB Commissioner Rob Manfred, a frequent critic of Diamond Sports, is threatening to veto a new deal with the Diamondbacks because it would be more favorable to the RSN (regional sports networks) company.
In yesterday’s motion, MLB said it was negotiating with pay TV services in the Arizona area to carry a new channel for the Diamondbacks games if Diamond Sports terminates the deal, as the RSN company is permitted to do under bankruptcy law. This is what the league did in May when Diamond Sports rejected its contract with the San Diego Padres. MLB started broadcasting the Padres games the next day.
“MLB’s paramount interest is the continued broadcast of all games to its fans,” the league says in the new motion. “To this end, MLB is focused on the ability of the Diamondbacks to produce, distribute and benefit financially from their games. As was the case with the San Diego Padres…MLB stands ready to broadcast the Diamondbacks’ games. However, rejection of telecast rights agreements without additional clarity puts the broadcast of games post-rejection at risk.”
The situation’s uncertainty motivated DIRECTV’s motion as well. The satcaster said it doesn’t want to be forced into a position where it’s still paying for Bally Sports Arizona while beginning to pay for a new Diamondbacks channel run by the league.
“DIRECTV has notified (Diamond Sports) that it does not believe it should pay (Diamond Sports) for Diamondbacks content for the period following rejection,” DIRECTV’s motion states. “Otherwise, DIRECTV could be compelled to pay twice for the same content, a nonsensical and inequitable result. DIRECTV is hopeful that it can resolve this issue consensually with (Diamond Sports), but if the parties cannot reach an acceptable arrangement, DIRECTV may seek this Court’s assistance with resolving this dispute.”
In its statement to the court, MLB supports DIRECTV’s position.
The concerns expressed by MLB and DIRECTV will likely become moot if Diamond Sports and the Diamondbacks are able to reach a new agreement. But it’s clear that both parties are preparing for the real possibility that will not happen.
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— Phillip Swann
@tvanswerman
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