If you have been following along with the Diamond Sports bankruptcy story, you know that nearly half of MLB’s teams televise their games on a RSN owned by Diamond, which took on tremendous amounts of debt to buy these channels and is now wending its way through bankruptcy court. Here’s the last installment posted here, a couple of weeks ago.
I have an update for you regarding Arizona Diamondbacks games that are carried on Diamond Sports’ Bally Sports Arizona, via Shawn Medow of Sports Business:
Diamond Sports Group’s bankruptcy hearing on the regional sports network operator’s contract with Major League Baseball’s Arizona Diamondbacks has been adjourned until July 17.
Lawyers for DSG filed an emergency motion on June 22, asking the court to reject the company’s broadcast agreement with the Diamondbacks, effective June 30. The hearing was originally set for June 29 in Texas, but will now be held on July 17. The Diamondbacks will remain on DSG’s RSN, Bally Sports Arizona, until the case is resolved.
If their contract is rejected, the Diamondbacks would be the second team to have broadcasts produced and distributed by MLB after the San Diego Padres were dropped by DSG at the end of May.
Padres games are now on a streaming channel (and also available via cable/satellite providers in the San Diego area) for $19.99 a month.
Daniel Frankel of Next|TV, though, says that the company and the team are trying to work out a deal. They issued a joint statement:
“Diamond Sports Group and the Arizona Diamondbacks have decided to postpone tomorrow’s hearing due to ongoing and positive discussions toward finding a solution,” the joint statement read. “During this time, Bally Sports Arizona will continue to broadcast D-backs games and fans will have the same televised access they have been able to enjoy from the beginning of the season.”
Perhaps that’ll work and perhaps it won’t. The NBA’s Phoenix Suns and WNBA’s Phoenix Mercury, whose games also appeared on Bally Sports Arizona, tried to leave that channel and made a deal to broadcast their games over-the-air in the Phoenix area and also on a streaming service. For now, that deal’s being blocked by a bankruptcy court.
In the end, MLB might wind up taking over all the broadcasts of the Diamond Sports affiliated teams and putting together a streaming package similar to the one that the Padres have. That, of course, depends on what happens with Diamond Sports’ bankruptcy and whether they stop paying rights fees to other teams, as they did in San Diego. Per the Sports Business article linked above, there are other teams up next for that to possibly happen:
The bankruptcy court previously ruled that DSG was responsible for paying rights in full to the Diamondbacks, Texas Rangers, Minnesota Twins, and the Cleveland Guardians. DSG has since paid the Rangers fee.
So we should hear more about the Rangers and Guardians situations soon.
The RSN business is in extreme flux right now. Warner/Discovery, which owns three AT&T Sportsnet channels that carry Astros, Rockies and Pirates games, said earlier this year it wants out of the RSN business entirely, so those teams will have to figure out another way of broadcasting their games, likely as early as next year. NBC Sports, which owns RSNs that carry White Sox, Phillies, Giants and Athletics games, could be next after that.
So far, Marquee Sports Network, which is co-owned by Sinclair Broadcasting and the Cubs, is not affected by the RSN bubble bursting. Neither are four other RSNs that also are co-owned by teams: YES Network (Yankees), NESN (Red Sox), SNY (Mets) and SportsNetLA (Dodgers).
There’s no question, though, that streaming is the wave of the future for sports broadcasting. What that will do to money available to teams from broadcasting is anyone’s guess — and mine is, it’ll be far less than rights fees bring to teams now.
That will, obviously, reduce the total money available to spend on players, and you can imagine where that’s going to lead.
As always, we await developments.