Diamond Sports got the green light for its plan to exit its current RSN deals by the end of next year, but it is not smooth sailing as of yet.
Diamond Sports (operator of the Bally Sports RSNs) can move forward with plans to relinquish all of its existing contracts by the end of the 2024 Major League Baseball season, pending the resolution of motions by MLB and Sinclair, a bankruptcy judge ruled Wednesday. Diamond entered into a “cooperation agreement” with its creditors last week under which it plans to offload existing rights after the current and coming seasons but continue carrying games in the meantime.
As part of the cooperation agreement, Diamond — as previously noted — struck a deal with the NBA guaranteeing that it will fulfill all of its contractual obligations this season in exchange for a 16 percent reduction in rights fees. That was also approved by the court Wednesday. Diamond is widely expected to reach a similar deal with the NHL in the coming days.
MLB has no such deal and thus no way to prevent Diamond from dropping teams midseason, as was the case with the Diamondbacks and Padres last year. Diamond, which has also parted ways with the Twins since the season ended, said Wednesday there are MLB teams whose rights are “too expensive” for it to continue broadcasting — the Guardians and defending champion Rangers, per The Athletic — unless there are “concessions.”
MLB has filed motions for months — dating back to the start of last season — seeking to compel Diamond to definitively “assume or reject” its contracts. In its latest motion last month, MLB argued that the “extensive planning” required to broadcast a Major League Baseball season — to say nothing of negotiating new media rights deals — requires sufficient lead time.
Diamond has said that the cooperation agreement fulfills that need by requiring a final decision for the 2024 season by December 31, which it says is enough time for MLB to prepare alternative plans by the time play begins in March. MLB said last month that it wants an immediate deadline.
In that same motion, MLB also said it has been left to ‘merely guess’ which teams Diamond would potentially drop, but Diamond maintains that it has identified those teams to MLB. A lawyer for the Rangers — one of the two teams identified by The Athletic as in danger of being dropped — said Wednesday that the team does not know Diamond’s intentions.
As for Sinclair, which originally purchased the formerly Fox-branded RSNs from Disney in 2019, the issue is $250 million in management services fees that it says the cooperation agreement does not take into account.
Depending on how those motions are ruled, the cooperation agreement could — in the words of the judge Wednesday — “blow up.” The court plans to hear arguments on both December 8.
(News from court filings, The Athletic 11.15, Awful Announcing 11.15)
