Now that the Diamond Sports Group has officially filed for Chapter 11 bankruptcy, the next question is “what now?”
If Diamond has their way, the bankruptcy proceedings will conclude with the company owning the streaming rights for all 14 MLB teams under its umbrella, up from the five it currently possesses.
Per ESPN’s Alden Gonzalez, Diamond wants the rights to help bolster Bally Sports+ (which isn’t a new development), and will consider parting ways with teams whose rights cannot be acquired.
The goal, a source familiar with the situation said, is for the company to acquire streaming rights for all 14 of its major league teams in order to broadcast games both through a linear cable model and on direct-to-consumer platforms. At the moment, Diamond has rights to stream the games to just five teams. It would have to negotiate the other nine with MLB, but MLB has previously been hesitant to sign off on additional rights for a company that has yet to prove itself financially sustainable.
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Diamond’s hope to building a sustainable business, a source said, is to prop up its Bally Sports+ streaming platform, ideally by making it a one-stop shop for fans to also purchase tickets and merchandise, place bets and read up on their teams. Diamond owns streaming rights for all 16 of its NBA teams and all 12 of its NHL teams, but for only about a third of its MLB teams.
Through the restructuring process, Diamond is widely expected to shed the contracts of its less-profitable teams. Not being able to acquire direct-to-consumer rights, which was part of the reason it entered into a grace period with the D-backs, will factor into which teams it chooses to hold onto.
MLB’s refusal to sell streaming rights to Diamond is nothing new. In 2021, the league wanted a cut of Bally Sports+ in exchange for the digital rights. Last fall, MLB Commissioner Rob Manfred said that the league “never received a coherent response” to questions about how the streaming rights would help Diamond’s financial outlook. Earlier this year, it was reported that Diamond wanted referral fees from fans who bought tickets or merchandise after clicking links through Diamond’s streaming platform, and that the company also wanted to sell different streaming packages for games. MLB wasn’t amenable to either idea.
This ties in with Diamond’s desire for Bally Sports+ to be “a one-stop shop for fans.”
Diamond has the streaming rights to just five MLB teams: the Brewers, Marlins, Rays, Royals, and Tigers. Five more teams have been mentioned as either being jettisoned or voluntarily leaving Diamond: the Diamondbacks, Guardians, Padres, Rangers, and Reds. Another four teams fall into neither category: the Angels, Braves, Cardinals, and Twins. Minnesota is the outlier in this group, as their media rights deal with Diamond expires after the 2023 season.
I’m curious if a team possibly in danger of being dropped would be willing to sell their digital rights to Diamond in order to retain their broadcast partner. That could end up be the deciding factor as to who stays and who goes if MLB and Diamond can’t agree to a wider agreement for streaming rights this year.
[ESPN]
