By Phillip Swann
The TV Answer Man –@tvanswerman
TV Answer Man, you answered my question about updating the Comcast and Bally Sports situation. My question now is what happens if there’s no deal between them? Will that mean the end of Bally Sports? — Marty, St. Paul.
Marty, as you note, Sports Business Journal reported Monday night that the carriage agreement between Comcast and Diamond Sports, the owner of the Bally Sports regional sport networks, ends by week’s end. The publication says negotiations are ongoing but we don’t know if they are close to an agreement or not. For reasons we stated here, Comcast might be inclined to walk away from the table unless Diamond offers favorable rates for carrying the RSNs. The cable operator has shown a willingness to allow regional sports networks to go black if necessary.
But what would that mean for Diamond Sports? With the RSN company in bankruptcy, this would not be an ordinary carriage dispute that the companies could work to settle over a few weeks or even a month or more. Diamond Sports has a grocery’s list of creditors and they would likely file immediate motions to start seizing assets and/or terminate current agreements.
For example, Diamond must make regular payments to 12 NHL and 15 NBA teams this season for their broadcast rights. The teams would likely try to end their deals with Diamond knowing that the company would be without Comcast’s carriage fees, an important source of revenue to make those team payments. (The leagues would then step in and do the broadcasts, at least temporarily, as Major League Baseball did for the Arizona Diamondbacks and San Diego Padres when Diamond Sports ended their deals with those teams this year.) This scenario could play out as early as this weekend or Monday because SBJ also writes that the company’s deadline for negotiating a bankruptcy restructuring plan with the creditors is this Saturday. The teams, particularly the NBA and NHL. will be front and center for that with new seasons starting in October.
Diamond, of course, knows what’s at stake. The company has to be flexible in the Comcast negotiations, if not outright generous with its fees without reducing them to a level where it would hurt its profitability. The cable operator holds Diamond Sports’ fate in its hands and the sports world is waiting to see what it will do.
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— Phillip Swann