The Texas Rangers are the latest team to join MLB’s motion in the Diamond Sports bankruptcy hearing. Per The Athletic, the Rangers claim Diamond skipped a payment to the team this season.
Here’s what was written in the motion.
“That ‘there ain’t no such thing as a free lunch’ is a well-recognized, simple, but axiomatic economic principle,” the Rangers wrote in the court filing. “Everyone understands it — everyone, apparently, except the Debtors (Diamond). Here, they are getting lunch — using the right to create content based on the Rangers’ baseball games, and in turn selling that content to distributors — but without paying for it.
“The Rangers now join the growing list of MLB teams being held hostage by the Debtors.”
The Diamondbacks, Guardians, and Twins all have had payments skipped by Diamond this season. Payments were made to several other teams over the last month, including the San Diego Padres. Diamond entered a 15-day grace period with the Friars in March, but made the payment before the deadline. Payments to the Cleveland Guardians and Minnesota Twins were skipped earlier this month. The Diamondbacks’ payment was skipped in March. Eight teams got paid as expected, though the Rangers were not one. The Cincinnati Reds also had a payment skipped in recent days.
The Rangers have aggressively pushed Diamond over the last month. The team said that it would end its rights deal with Diamond “in the event of its insolvency.” Diamond countered by saying it had never missed a payment to the team.
In their filing, the Texas Rangers claimed that their reported 20-year, $3 billion contract is “lower than the fair value.”
The Rangers took aim at Diamond’s intention to restructure the rights fee payments and ultimately pay less than what it contractually owes based on “market conditions.” According to the Rangers’ filing, “If anything, the evidence to be presented on May 31 will prove that the contract rate is lower than the fair value.”
A hearing is scheduled for May 31st. The judge in the case will consider tomorrow whether or not Diamond Sports should make payments to the teams prior to that hearing.
Last week, The Athletic reported that Diamond was looking to restructure its contracts with the Diamondbacks, Guardians, and Twins. The company claims the deals were signed before cord cutting accelerated and cable subscriptions cratered, overvaluing the contracts. The Rangers’ deal, which reportedly pays an estimated $111 million in 2023, would seemingly also fit that description.
Texas Rangers games air on Bally Sports Southwest. The RSN also airs the Dallas Mavericks, Dallas Stars, and San Antonio Spurs. It has the second largest footprint of the Bally Sports RSNs behind Bally Sports South.
About Joe Lucia
I hate your favorite team. I also sort of hate most of my favorite teams.