Diamond Sports Group, which owns 19 regional sports networks (RSNs), has ventured into bankruptcy, a predictable development that will nonetheless have a major impact on the way fans watch games and the way teams profit off them.
Diamond, a Sinclair subsidiary that is known to viewers as Bally Sports, stands as the largest distributor of live sports within the United States — and it is in serious financial turmoil. The company took on $8 billion of debt to acquire the RSNs in 2019, watched as the rate of cord-cutting accelerated throughout the country and was forced to file for a Chapter 11 restructuring last week.
It’s a situation that promises to have wide-ranging effects, particularly, given the timing, within Major League Baseball. What does it mean for fans? For the future of live programming? For sports? Answers to some of the most pertinent questions — including, yes, blackouts — are below.
Which teams does this affect? Will fans be able to watch their games?
Diamond Sports Group runs the RSNs for 42 teams across MLB (14 teams), the NHL (12 teams) and the NBA (16 teams). The latter two leagues are navigating the tail end of their respective seasons, leaving time for this process to play out. MLB, however, is less than two weeks away from Opening Day, creating a heightened sense of urgency. But both MLB and Diamond Sports Group have been adamant that fans won’t miss any of their games.
Diamond Sports Group’s CEO, David Preschlack, who was hired in December, wrote in a statement last Tuesday that the company “will continue broadcasting games and connecting fans across the country with the sports and teams they love.” MLB, in its own statement, wrote: “Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process. Major League Baseball is ready to produce and distribute games to fans in their local markets in the event that Diamond or any other regional sports network is unable to do so as required by their agreement with our Clubs.”
If MLB needs to take over the broadcasts, how would it work?
Some of the details are still uncertain. Some have questioned whether MLB has the capability to take over broadcasting duties if it comes to that, but MLB appears confident it can pull it off. The details are still a bit hazy, but the league recently started a local media division, fronted by Billy Chambers, Sinclair’s former chief financial officer. The short-term plan would be to offer streaming through its MLB.TV app at a yet-to-be-determined price (it’ll be cheaper than the current price to stream out-of-market games, according to a league source) and also air games on a yet-to-be-determined cable channel.
MLB would have to negotiate deals with cable companies to make the latter happen. That would take time, but a league source downplayed that factor, pointing to how long Diamond’s financial unraveling has been anticipated. Putting together games also requires a lot of employees (producers, camera operators, broadcasters, etc.). MLB, a league source said, might turn to a lot of the people who worked those jobs for Bally Sports in their respective markets, many of whom do so on a freelance basis.
So … what happens next? How long until we know where the 14 teams will end up?
A lot could happen really fast. Between now and April 30, 13 of the 14 teams under the Bally Sports umbrella are owed their rights fees, an industry source said, potentially forcing a lot of quick decisions from Diamond Sports Group and its creditors.
In order to remain in business, Diamond needs to maintain agreements with at least some of its teams. And in order to maintain those agreements, they need to, well, pay them. Skipping payments would allow said teams to break free from their contracts, as MLB commissioner Rob Manfred mentioned last month.
A breach of contract triggers a court hearing, and that process can take anywhere from a few days to a few months. While that is playing out, Diamond would be incentivized to continue airing games because it would be generating subscription revenue without having to pay rights fees.
But there’s a good chance that Diamond’s creditors eventually decide to drop some of the least profitable teams from the portfolio. In that case, MLB would need to step in. A league source anticipates that MLB will handle broadcasting for at least five teams in the very near future. So far, Diamond Sports Group has missed payments to the D-backs and, more recently, the Padres, triggering the contractual grace period that will probably lead to MLB taking over.
Can MLB really get the rights to the Bally Sports teams so quickly?
The answer to that question will be dictated entirely by what Diamond Sports Group decides to do with its portfolio. Long term, the company hopes to build a more stable business by propping up its direct-to-consumer platform, Bally Sports+. But streaming rights are needed. Diamond Sports Group has the right to stream for all 16 of its NBA teams and for all 12 of its NHL teams. But it can only do so with five of the 14 MLB teams — the Royals, Brewers, Rays, Marlins and Tigers, all of which are smaller-market clubs. It wants to acquire streaming rights for the nine other teams and eventually turn its platform into a one-stop shop for fans, where they can also purchase tickets, buy merchandise and place bets.
But MLB, sources said, has been unwilling to provide more streaming rights to a company that has not proved to be financially stable. MLB has no intention of also offering the rights to sell tickets or merchandise to Diamond Sports Group, essentially turning the company into a direct competitor.
The bankruptcy proceedings will turn Diamond’s debt into equity for its largest secured creditors. Those creditors will essentially run the company, and not securing streaming rights is expected to significantly influence which teams those creditors decide to hold onto and which teams they decide to shed. We’ve already seen the beginning of this play out with the D-backs and Padres. Other teams will follow.
Could this ultimately mean the end of blackouts?
Potentially. Here’s how it would work, in an ideal sense: As teams free themselves from their RSN contracts, either intentionally when their deals expire or unintentionally when they’re not paid what’s owed to them, MLB would absorb them one by one. At that point, it can air games, say, on its Extra Innings channel (the long-term plan would be to regionalize MLB Network) and also through MLB.TV for local fans, since there would no longer be a competitor in the local market blocking them from doing so.
It isn’t quite so simple, and it would require making deals with cable companies that also provide internet service. But MLB seems confident it can pull it off. In order to wipe blackouts out entirely, MLB needs to secure the television rights to all 30 teams. At the moment, it has the rights to zero — and that will be the case as long as Diamond continues to meet its contractual obligations. However, several sources within MLB and those knowledgeable on the RSN industry predict that soon teams will start to be shed, with Diamond’s creditors eliminating the less profitable ones.
How will all of this affect the product on the field — revenue, payrolls, etc.?
In the short term, it won’t have any impact; payrolls are set, contracts are fully guaranteed.
Long term … well, that’s what’s causing concern.
In the aggregate, major league teams draw somewhere in the neighborhood of 20% of their revenue through their RSN deals, many of which are robust (for example, near the end of 2011, the Angels signed a 20-year deal worth a reported $3 billion with what was then Fox). Diamond’s financial turmoil — and more broadly the continual erosion of the traditional cable model — promises to alter the financial landscape of the sport. Teams are all but guaranteed to generate less revenue because of it in the short term — but MLB is hopeful that the trade-off will be long-term gains.
The league’s ultimate goal is to place broadcasting rights — both through the linear cable model and on over-the-top platforms — under one umbrella. This has long been MLB’s plan; Diamond’s Chapter 11 filing simply put the wheels in motion a little earlier than the league would have wanted.
When all games are broadcast on streaming platforms, which many consider an inevitability, the league would aim to create a direct line to revenue from subscriptions and advertising, while also hoping to strike deals with other streaming companies. Under a model like this, all the revenue would essentially fall in one bucket, and it would be up to the 30 owners — and the MLB Players’ Association is also going to want to be involved — to determine how it gets split up.
A league source, pointing to the rapid rate at which the traditional cable model is deteriorating, predicted that all 30 teams would fall under its umbrella within two to three years. But some league executives believe that highly profitable big-market teams such as the New York Yankees and Boston Red Sox, both of whom own their networks, would never agree to that type of structure.
Speaking of the Yankees and Red Sox, what’s the status of the 16 teams NOT involved with Diamond Sports Group?
Four teams — the Colorado Rockies, Houston Astros, Pittsburgh Pirates and, to a lesser extent, Seattle Mariners — are under Warner Bros. Discovery, which previously revealed plans to shed its RSN commitments by the end of the month, creating a completely different scenario. (The other 12 major league teams are with broadcasting companies that, at least for now, are stable.)
Warner Bros. Discovery announced in late February that it was planning to exit the regional sports business, saying teams had until the end of March to reclaim their media rights or the company would move into a Chapter 7 liquidation. The company, a league source said, has been a cooperative partner through the process. The expectation is that broadcasts for the Pirates, Rockies and Astros will be unchanged in 2023. In 2024, they’ll fold into MLB’s broader strategy. The Mariners, meanwhile, run their own RSN and pay Warner Bros. Discovery a service fee to operate it for them. They are expected to be unaffected.
The Penguins’ captain tied Hall of Famer Joe Sakic at 1,641 points with an assist on Bryan Rust‘s first-period goal. Crosby then moved past Sakic with an assist on Drew O’Connor‘s sixth goal of the season later in the period as the Penguins raced to a 4-1 advantage.
Crosby’s 12th goal 5:42 into the second put the Penguins up 5-1, providing some welcome wiggle room for a team that has struggled to hold multiple-goal leads this season.
The next name ahead of Crosby on the career scoring list is none other than Penguins icon Mario Lemieux, who had 1,723 points.
“I’m running out of superlatives [about Crosby],” Penguins coach Mike Sullivan told reporters after the game. “What he’s accomplishing, first of all, his body of work in the league, his legacy that has been built to this point, speaks for itself. He’s the consummate pro. He just represents our sport, the league, the Pittsburgh Penguins in such a great way.
“He just carries himself with so much grace and humility and integrity. And he’s a fierce competitor on the ice.”
Rust also had a goal and two assists for Pittsburgh, which snapped a three-game losing streak by beating the Oilers for the first time since Dec. 20, 2019.
“For us, that was our goal — to be on our toes, be all over them, be on top of them, because they’re very fast, a skilled team,” Rust told reporters after the game. “I think just a result of that was us being able to get some offense.”
McDavid finished with three assists. Leon Draisaitl scored twice to boost his season total to an NHL-best 31, but the Penguins beat Stuart Skinner four times in the first 14 minutes. Skinner settled down to finish with 21 saves but it wasn’t enough as the Penguins ended Edmonton’s four-game winning streak.
TAKEAWAYS
Oilers: Their attention to detail in the first period was shaky. Though Skinner wasn’t at his best, the Penguins also had little trouble generating chances.
Penguins: Pittsburgh remains a work in progress at midseason but showed it can compete with the league’s best.
UP NEXT
Edmonton finishes a four-game trip at Chicago on Saturday. The Penguins continue a five-game homestand Saturday against Ottawa.
ST. PAUL, Minn. — The Minnesota Wild have added defensemen Jonas Brodin and Brock Faber to their list of key injured players, leaving them out of the lineup for their game against Colorado on Thursday night.
Brodin’s status is day to day. He has a lower-body injury from blocking a shot late in the 6-4 win over St. Louis on Tuesday night. Wild coach John Hynes had no update after the team’s morning skate on Thursday on the timetable for the return of Faber, who has an upper-body injury from an elbow he took from Blues forward Jake Neighbours at the end of his first shift.
The Wild already were missing captain Jared Spurgeon (lower body), who is expected to be out for another week or two after taking a slew foot from Nashville forward Zachary L’Heureux in their game on Dec. 31. That leaves Minnesota without three of its top four defensemen. Jake Middleton just returned from a 10-game absence because of an upper-body injury.
The Wild also have been without star left wing Kirill Kaprizov (lower body), who missed his seventh straight game on Thursday. Kaprizov, who is tied for fourth in the NHL with 23 goals and ninth in the league with 50 points, has skated on the last two days and could return soon.
The Columbus Blue Jackets placed forward Sean Monahan on injured reserve Thursday because of an upper body injury sustained in the 4-3 shootout win at Pittsburgh on Tuesday.
Adam Fantilli is expected to move up to center the top line when the Blue Jackets host the Seattle Kraken on Thursday.
“Guys have watched how [Monahan] conducts himself, and hopefully they try to do the exact same thing,” coach Dean Evason said Thursday. “Our bench is calm in large part because of him up front and [defenseman Zach Werenski] on the back end. They’re both very calming influence players, but we have other guys that do that as well.
“But if the guys that are playing in tonight’s hockey game have learned anything from ‘Monny,’ it’s that he’s even-keeled. He doesn’t get too high, too low, all those clichés. He just goes about his business. We expect our team to do that here tonight.”
In a corresponding move, the Blue Jackets added rookie forward Owen Sillinger on an emergency recall from the AHL’s Cleveland Monsters.
Monahan, 30, has 41 points (14 goals, 27 assists), 14 penalty minutes and a plus-17 rating in 41 games this season. He ranks second on the team in plus/minus rating and third in goals, assists and points.
He has 579 career points (258 goals, 321 assists) in 805 games with the Calgary Flames (2013-22), Montreal Canadiens (2022-24), Winnipeg Jets (2024) and Blue Jackets, who signed him as a free agent in July. The Flames selected him sixth overall in the 2013 NHL draft.
Sillinger, 27, is on a one-year, two-way NHL/AHL contract with the Blue Jackets. He has eight goals and 17 assists with 18 penalty minutes in 34 games with Cleveland this season.