By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, can you explain what is going on with the owner of the Bally Sports channels? They are going to get rid of the Rangers games after everyone said they would and then they get rid of the ACC games on Raycom. Do they want to stay in business or not? What is the plan here?! — Phil, Scottsdale, Arizona.
Phil, Diamond Sports yesterday made its quarterly rights payment to the Texas Rangers which means the Bally Sports Southwest channel will continue to broadcast the Texas Rangers games through the 2023 season. The RSN company, which declared bankruptcy in March, has said that it might end its contracts with several MLB teams but the Rangers are good for now despite fears to the contrary earlier this week.
But Diamond surprised some industry observers on Wednesday by filing a motion in the bankruptcy court to end its agreement with Raycom which means it will no longer carry the broadcaster’s ACC games, including college football and basketball. This is the second contract voided by Diamond since the bankruptcy. The company, which owns 18 Bally Sports regional sports networks, dropped the rights to the San Diego Padres games on May 30 when it decided to stop paying the team. Major League Baseball took over the broadcasts, starting with the team’s May 31 game against the Miami Marlins.
What do the two actions tell us about Diamond Sports’ future plans? Four more MLB teams (Guardians, Twins, Reds, Diamondbacks) have payments due in the next four weeks. Will Diamond Sports now keep them as it did the Rangers?
By keeping the Rangers and rejecting Raycom, Diamond Sports told us a few things.
1. Diamond Sports will not continue an agreement with a team or broadcaster if it’s not profitable.
The company determined that the Rangers, who are in first place in the AL West, and play in the economically vibrant Dallas market, have the potential to be a serious money-maker. If Diamond wants to stay in business long-term, as it says it does, it would have been foolish to reject the Rangers.
2. Diamond Sports is hunting to find contracts it can jettison to turn the company around.
But the Raycom agreement was vastly different from the Rangers agreement. The broadcaster provided programming not considered crucial to the company’s business. The ACC games are nice, but the conference is everywhere on TV, including ESPN’s ACC Network. These are not exclusive broadcasts, unlike the regional broadcasts of a MLB team. It was likely a relatively easy decision for Diamond Sports to stop paying Raycom.
What does this mean for the four MLB teams?
The Reds, Twins, Diamondbacks and Guardians are in smaller markets than the Rangers, reducing the revenue potential. Consequently, they are in the crosshairs, even if they do provide exclusive programming. With carriage fees from cable and satellite operators continuing to fall, Diamond Sports has to assess whether each team can generate enough revenue to justify the deal. (If it does drop a team, MLB will broadcast the games.)
The Diamondbacks, however, might be in a different category since the team is now in the first place in the NL West. The second half of the season could be a winner for the team and Diamond Sports.
Bottom line: Despite what some analysts and journalists were suggesting a few months ago, Diamond Sports will be around for awhile as a RSN company. (Although it will need to renew some pay TV deals.) But when the unit emerges from bankruptcy, it will be a leaner one with fewer contracts.
Phil, hope that helps. Happy viewing and stay safe!
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— Phillip Swann