By Phillip Swann
The TV Answer Man –@tvanswerman
A Texas bankruptcy court judge will hold a hearing tomorrow (May 31) on Diamond Sports’ motion to reduce its payments to professional teams it carries on the Bally Sports regional sports networks. However, Cleveland.com this afternoon quotes sources as saying that it’s unlikely the judge will rule tomorrow and that the final verdict “may take some time.” (Diamond has the broadcast rights to 14 MLB teams, 16 NBA teams and 12 NHL teams. You can see a list of the teams here.)
Diamond is arguing that the payments should be reduced because carriage fees from pay TV operators have sharply declined due to shrinking subscriber totals. MLB has led the opposition to Diamond’s motion, saying the company should honor their contracts.
If the judge agrees with the RSN company, it could lead to a sudden reduction in team revenue for possibly every Bally Sports team. The implications of that are uncertain but it’s not hard to envision a scenario where some teams become less aggressive in pursuing free agents.
Diamond is already paying a reduced amount (75 percent) to four teams as approved by the bankruptcy court: the Guardians, Twins, Diamondbacks and Rangers. But the reduced payment levels are temporary until the judge rules on Diamond’s motion. If Diamond wins, it will likely move to make the reduced payments permanent for those teams and others.
MLB is arguing that if Diamond fails to make a team payment, the broadcast rights should return to the team and the league which would then broadcast the games on MLB TV and MLB Network using freelance personnel.
The league today notified the court that it has six witnesses scheduled for tomorrow:
1. MLB Commissioner Rob Manfred
2. Robin Flynn, expert witness and former Kagan research executive
3. Richard Dorffer, Chief Financial Officer, Cleveland Guardians
4. Thomas Harris, Executive Vice President and Chief Financial Officer, AZPB Limited Partnership
5. Neil Leibman, President of Business Operations and Chief Operating Officer, Rangers Baseball LLC
6. David St. Peter, President, Minnesota Twins.
Diamond has three witnesses scheduled: Leo J. Hindery, Jr., co-founder of the Yes Network, and the company’s CEO and COO.
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— Phillip Swann