It’s expected that Diamond Sports Group is within one week from filing for Chapter 11 bankruptcy protection. Once that happens, there probably won’t be much difference at first. Though, it’s reported that the subsidiary of Sinclair Broadcast Group already failed to pay one MLB team, and exercised a grace period in their contract.
Sports Business Journal’s John Ourand reported that Diamond Sports is late on a payment to the Arizona Diamondbacks. Diamond’s statement to SBJ said, “We’ve been making our rights payments to teams with the exception of the Diamondbacks, where we have exercised a contractual grace period in order to maximize flexibility, especially given that we do not have DTC rights. We are continuing to broadcast games and are operating our business as usual.” Diamond Sports’ grace period ends at 11:59 PM, Thursday, March 17.
While Diamond Sports is expected to produce and air games, as well as continue paying rights fees while in bankruptcy, there’s a chance they may not be making payments for every team.
Ourand stated that the Diamondbacks have an “extremely favorable deal” on the team side. The San Diego Padres, Cleveland Guardians, and Cincinnati Reds have similar favorable deals and may be at risk of not being paid. SBJ revealed that the Padres are reportedly getting paid $60 million/year through 2032.
If Diamond Sports is unable to pay, MLB can try to get back control of the rights. If so, that will be fought through bankruptcy court, but games would still air on Bally Sports throughout this process.
It will be interesting to see what comes out on the Diamond Sports front this upcoming week. Ourand details more in his piece that’s worth checking out, including upcoming negotiations with Diamond’s four biggest distributors, and what happens if Bally Sports loses out on the rights of a team due to non-payment.
