By Phillip Swann
The TV Answer Man – @tvanswerman

TV Answer Man, I read that Bally Sports won’t make their rights payment to the (Cleveland) Guardians. What does that mean? No more games on TV? MLB TV getting the games? Can you explain for us? — Patrick, Westlake, Ohio.

Patrick, Diamond Sports, the operating unit for the 19 Bally Sports regional sports networks, last month declared bankruptcy with the intention of restructuring its debt and its financial arrangements with MLB, NHL and NBA teams. (Bally has the regional TV rights to 14 MLB teams, 12 NHL teams and 16 NBA teams.)

The Cleveland Plain-Dealer reported on Saturday that Diamond is “unlikely” to make its next payment to the Cleveland Guardians. (The newspaper writes that the payment was scheduled for that day.)

Also See: Bally Sports Misses Payments to Twins & Guardians

The New York Post last month reported that Diamond might skip their payments to the Guardians, Reds, Padres and Rays. Diamond last week actually did make its Padres payment, probably because the team is expected to make the playoffs this year, which could turn the Bally Sports San Diego RSN into a winner as well.

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But Bally’s channels for the Guardians, Rays and Reds situations are less likely to be profitable during the 2023 season. So the likelihood of missed payments is higher. (Diamond has also missed a payment to the Arizona Diamondbacks but that is not expected to affect its rights because it’s part of the bankruptcy filing.)

So what if Diamond missed Saturday’s payment? What happens next?

First, Diamond would have a 10-day grace period to pay up. It shouldn’t be forgotten that Diamond paid the Padres during the grace period for the Padres so it could happen again. Diamond could be planning to use the grace period to negotiate better terms with the Guardians but ultimately pay the team regardless of the outcome.

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Second, the Guardians will remain on Bally Sports Great Lakes, the regional TV home of the team, during the grace period. Diamond is still the rights holder.

Third, if the payment is not made after the grace period, the ball is in MLB’s court, to mix sporting metaphors. MLB Commissioner Rob Manfred could go to court to take back Diamond’s rights to the Guardians. If that occurred, the league could then begin showing the games on MLB TV without an in-market blackout. It also could then seek a new carriage deal with pay TV providers that carry the Guardians channel. Manfred has promised that fans will not miss any games if Diamond stops broadcasting them.

The Guardians situation could trigger the long-awaited showdown between the league and Diamond. The latter wants new financial arrangements with the league while MLB has suggested it would rather run the RSN business itself rather than renegotiate terms.

Set your calendars for mid-April. Sounds like it’s going to be a particularly busy time at MLB headquarters.

Patrick, hope that helps. Happy viewing and stay safe!

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— Phillip Swann