Diamond Sports Group will likely find itself almost out of the Major League Baseball business altogether next season, with a Diamond attorney declaring in court last week that the bankrupt regional sports network operator could drop 11 more MLB teams from its Bally Sports channels.
Barring a shift in negotiations with some or all of those individual teams, only the Atlanta Braves would remain tied to Bally Sports. The Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, Tampa Bay Rays and Texas Rangers would all have to find new local television arrangements for their games.
Some of these teams are seeing their contracts with Diamond expire, while the bankrupt Sinclair Broadcast Group is using Chapter 11 restructuring to try to reduce its financial liability for other team deals.
“To be clear, rejecting these teams is not our preferred path,” Diamond attorney Andrew Goldman told the court last week, according to transcripts of the testimony. “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.”
Goldman’s declaration doesn’t seem final — Diamond does still appear to be negotiating with some or all of the aforementioned MLB clubs. But the Diamond attorney also told the court the subsidiary is done negotiating with the office of MLB Commissioner Rob Manfred, with which it has endured a publicly acrimonious relationship.
“We have been directly interfacing with all of our baseball partner clubs, not through the Commissioner’s office any longer, but directly with them,” Goldman said. “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.”
For his part, MLB attorney Jim Bromley described his league’s position as having been “sandbagged” by Diamond, telling the court he’d been informed about the decision to end the Bally Sports relationship with the 11 clubs just 75 minutes before last Wednesday’s hearing.
Diamond faces the very real possibility of having to program the long summer months on its remaining Bally Sports channels without the benefit of MLB’s 162-game regular-season schedule.
The teams, meanwhile, will have to find a way to replace the robust RSN licensing fees generated in the Bally Sports ecosystem.
MLB has been mulling a direct-to-consumer service that would showcase the local TV rights of at least a dozen of its teams. But most Bally Sports refugees have, on their own, carved out hybrid arrangements, expanding their reach via local broadcast TV deals, while simultaneously appealing to avid fans with subscription DTC streaming options.
Last week, for example, the NBA’s New Orleans Pelicans — another recent Bally Sports refugee — announced that each of its 82 regular-season games for the upcoming season not shown on national television would be broadcast over-the-air by Gray Television, on the newly launched “Gulf Coast Sports & Entertainment Network.”
The new network brand will put local Pelicans games on 13 Gray TV stations spanning 13 markets throughout the Gulf South region.
Additionally, the Pelicans have partnered with video technology company Kiswe to create a subscription DTC app that will let them stream live games and other related team content on connected TVs and mobile devices. More details about this new service are pending.
It’s multi-revenue-stream arrangement that’s also been carved out by NBA teams like the Utah Jazz and Phoenix Suns,, as well as the NHL’s Vegas Golden Knights and Florida Panthers, among numerous other teams.
The Pels’ new local TV arrangement will mean that far more TV viewers in and around New Orleans — 9.7 million of them, by the Pelicans’ count — will have free access to the team’s local games. That is far greater reach than the team enjoyed when Pels games were positioned behind the Bally RSN paywall.
However, initially at least, the team’s revenue streams from local TV distribution aren’t likely to come close to matching the steady Bally Sports paycheck.
Meanwhile, for its part, Diamond entered Chapter 11 restructuring back in March 2023 with more than 40 combined teams from the NBA, NHL and MLB under the Bally Sports roof.
The subsidiary, which managed to carve out carriage renewals with major pay TV operators including Charter, Comcast and DirecTV, among others, will finally enter a long-awaited hearing on November 14 to present its restructuring plan to its creditors and the court. At that time, barring a reversal of fortune with the 11 just-cast-off MLB teams, it could exit Chapter 11 with only around 20 pro-team constituents left in the Bally Sports fold.
Diamond Sports Group was formed by Sinclair Broadcast Group, shortly after the broadcaster paid $10.6 billion to acquire 19 Fox SportsNet-branded RSNs in 2019.
However, the ravages of cord-cutting, along with the disruption caused by the pandemic, quickly eroded Sinclair’s business-model projections.