The San Diego Padres averted disaster last week when the Diamond Sports Group reportedly made a rights payment to the team prior to the end of a grace period.
The Cleveland Guardians may not be so lucky.
Per Cleveland.com’s Paul Hoynes, Diamond was “unlikely” to make the first payment due to the Guardians, which was due on Saturday. A ten-day grace period would have then started, ending next week. If a payment is still not made, MLB is expected to reacquire the team’s media rights.
Diamond Sports Group, parent company of Bally Sports, was scheduled to make its first payment to the Guardians on Saturday for the 2023 season. Those close to the situation say it’s “unlikely’ that the payment will be made.
If the Guardians do not receive a payment, DSG will have a 10-day grace period to make the payment. If the payment isn’t made, Commissioner Rob Manfred has said Major League Baseball will step in to ensure Guardians’ games are televised.
It’s expected that a legal process will also take place as MLB works to retrieve the Guardians’ TV rights.
The Guardians, Reds, Padres, and Diamondbacks were rumored to be on Diamond’s chopping block due to the unprofitability of their media rights contracts. Diamond skipped a payment to the Diamondbacks last month, and left it until the last minute before paying the Padres. The Texas Rangers, not rumored to be a team Diamond is looking to shed, filed a notice to terminate their rights deal with Diamond last month “in the event of its insolvency.”
Cleveland.com’s article reports that the Guardians’ contract with Diamond Sports runs through the 2027 season, paying the team between $47 million and $51 million per season. A Forbes article last month estimated the team’s 2022 rights payout at $55 million.
Streaming rights are a significant part of Diamond’s battle with MLB. The league has been steadfast in its refusal to sell all of the Bally Sports teams’ streaming rights to Diamond, though five teams did on their own accord. In their bankruptcy proceedings, Diamond is aiming to acquire the streaming rights to the other nine teams in its portfolio, which would theoretically bolster the Bally Sports+ direct to consumer streaming service.
Notably, the Padres did not blink and sell their streaming rights to Diamond in order to receive their past-due rights payment. Granting Diamond those streaming rights could help grease the wheels and get the Guardians their payment in the next week or so.
Once the situation with the Guardians is resolved, either to the team’s benefit or detriment, eyeballs will remain in Ohio and shift south to the Reds. It’s unknown when their next payment from Diamond is due, though in 2016, a new 15-year media rights deal was announced, beginning in 2018.
Cleveland started its season by winning three out of four games in Seattle against the Mariners.
About Joe Lucia
I hate your favorite team. I also sort of hate most of my favorite teams.