TV Answer Man, I see that Bally Sports has declared bankruptcy. Does that mean the channels will stop doing the games? — Peter, San Diego.
Peter, Diamond Sports, the Sinclair operating unit for its 19 Bally Sports regional sports networks, announced yesterday that it has filed for Chapter 11 bankruptcy protection. The company, which pays enormous amounts to the teams and leagues for their broadcast rights, has been losing money due to shrinking carriage fees from pay TV operators. (See this article for more details on why RSNs are struggling.)
However, despite some articles suggesting a bankruptcy would mean Bally Sports would stop broadcasting some games, Diamond Sports said in a statement that it plans to continue doing the games while it restructures its business. Bally Sports carries the live games for 16 NBA teams, 12 NHL teams and 14 MLB teams.
“(We) will continue broadcasting games and connecting fans across the country with the sports and teams they love,” David Preschlack, Diamond’s CEO, stated. “With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company.”
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NBA and NHL officials have suggested they will work with Diamond Sports to create a viable solution to the company’s current financial troubles. However, MLB Commissioner Rob Manfred has been less supportive in public remarks and it’s unclear this morning if Diamond will continue its payments to all MLB teams or just most. If Diamond were to fail to make the payments to a team, MLB could seek to take back its broadcasting rights.
“Major League Baseball is ready to produce and distribute games to fans in their local markets in the event that Diamond or any other regional sports network is unable to do so as required by their agreement with our clubs,” MLB said in a statement last night. “We have the experience and capabilities to deliver games to fans uninterrupted.”
MLB could use its MLB Network production team to do the games.
The New York Post reported this week that Diamond could skip payments to four teams — the Arizona Diamondbacks, Cincinnati Reds, Cleveland Guardians, and San Diego Padres. However, there is nothing in the Diamond bankruptcy filing that suggests that will happen. (However, the filing shows that Diamond already owes more than $30 million to the Diamondbacks.)
Bottom line: The bankruptcy filing was not the end game that some predicted, but it remains to be seen what will happen between Diamond and MLB in the days and weeks ahead. Plus, with Diamond required to renegotiate carriage deals with the nation’s two largest pay TV operators, DIRECTV and Comcast, later this year, the company’s future is still up in the air.
Peter, hope that helps. Happy viewing and stay safe!
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I’m not a lawyer, but I think when a firm files for bankruptcy, all creditors get in line and no payments are approved without permission of the bankruptcy court. Good luck with MLB trying to enforce their rights payments from a bankrupt Diamond sports. Sure, MLB can take back control of its broadcasts and put it on it’s own network, but even if they can successfully negotiate carriage agreements with the pay TV providers, they are going to take a large haircut on the tens of millions dollars rights fees each team has been getting.
And you kiss the naming rights contract goodbye too for that stupid Bally’s branding.