Hallelujah, free at last. MLB’s long standing contentious relationship with the previously named Bally Sports Regional Networks appears to be coming to an end, with the counsel for the media company’s parent company telling a bankruptcy court Wednesday morning that it planned to reject ten of its 11 team contracts as it emerges from Chapter 11.
Only the Atlanta Braves would remain, barring future deals between clubs and the reconstituted Diamond Sports, the parent company for the RSN network.
The team contracts Diamond is tossing are with the Detroit Tigers, Miami Marlins, Cleveland Guardians, Kansas City Royals, St. Louis Cardinals, Minnesota Twins, Cincinnati Reds, Los Angeles Angels, Tampa Rays and Milwaukee Brewers. In a Chapter 11, the debtor is allowed to walk away from contracts.
“The amended plan, which we are filing today and I think is now loaded on the docket…the debtors are assuming a single telecast rights agreement that of the Atlanta Braves,” said Andrew Goldman, a lawyer for Diamond. “All of the other teams, all of Major League Baseball’s other agreements will be rejected under the plan that therefore provides certainty to all of the other teams in the debtor’s fold that they can, as of the end of the year, begin to make other plans, if they haven’t already for broadcasting the ‘25 season.
“To be clear, rejecting these other agreements is not our preferred path. In fact, as we’ve told the court and as we’ve told the teams, and as we’ve told the Commissioner’s office directly, our preferred path would be to bring as many teams into the reorganized debtor fold as is possible. And to that end, we have been directly interfacing with all of our baseball partner clubs, not through the Commissioner’s office any longer, but directly with them. And the Commissioner’s Office is aware of that and fully consenting to that, with respect to possibilities for modifications to the agreements that would allow us, on that modified basis, to change our view and assume those agreements for many of these clubs.”
MLB’s lawyer at the hearing, Jim Bromley, said he only learned about the significant developments 75 minutes before this morning’s hearing, saying he was “sandbagged.”
“This is just another example of being given no information by the debtors and then being greeted with `hurrahs’ that everything has changed once again, and we had no information about what is being done,” Bromley said. “We don’t have any basis to to assess anything that Mr. Goldman has said. It’s very clear that at least some of our clubs are being left out in the cold yet again.”
MLB and Diamond have been at loggerheads since well before the March 2023 Chapter 11 filing. MLB bid against Diamond parent Sinclair in 2019 for the RSNs, and again made an offer in January 2023. MLB commissioner Rob Manfred testified during the Chapter 11 that Sinclair’s CEO threatened him that he would throw the RSN company into bankruptcy if MLB didn’t agree to lower its rights payments.
With the cable market withering in the face of cord cutting, MLB has floated creating its own local media platform, an idea that could get a boost with ten teams now looking for a new home. Many of the teams cast aside from Diamond in the past year have turned to a combination of local over the air coverage and streaming. While that offers wider exposure, it can’t replace the fees generated by the traditional RSN system.
What’s next? Essentially everything climaxes November 14 at a reorganization confirmation hearing. There, the parties get to make the case for or against the plan-of-reorganization, an amended version of which was filed with the court. That plan includes the roughly two dozen NBA and NHL teams still under contract, plus the Braves.
A critical issue is how does a RSN survive without baseball and its 162-game season and place in the summer, the off-season for the NBA and NHL.? That is a massive programming void to fill.
As evidenced by Goldman’s comments, Diamond hasn’t given up on picking off MLB teams one by one, and is negotiating bilaterally with those clubs, not with MLB.
“It may be that the teams are not actively involving the commissioner’s office in the bilateral negotiations that they are having with us, but they are having them with us, as I can confirm for the court,” Goldman said of Bromley’s remark of being sandbagged.
Reading between the lines, Goldman is saying Diamond is going around MLB to see if it can sign MLB teams to new contracts after ripping up the older one.
“The idea that Mr. Goldman’s description here solves some sort of problem and throws it into the arms of the clubs is simply inconsistent,” Bromley said. “We’re not going to go into details as to what has been proposed or what has been requested, but we are fully involved in all of those conversations.”
Diamond’s lawyer also said the RSN company is near to a new naming rights deal. Bally Sports’ deal terminated when the MLB regular season ended. And Diamond is close to securing one or two streaming partners, he said. Diamond also has an unsigned agreement with Amazon Prime.
UPDATE: A Diamond Sports spokesperson issued the following statement to AA:
“Today marks an important step forward for Diamond with the filing of a baseline plan to enable us to emerge from bankruptcy as a viable, go-forward business before year-end. We have delivered proposals to and remain in discussions with our MLB team partners around go-forward plans. We firmly believe that through our linear and digital offerings we have created the best economic and fan-friendly engine for all of our team partners.”
