CLEVELAND, Ohio — Major League Baseball is confident that the 14 teams holding regional sports network contracts with financially-troubled Diamond Sports Group will be able to televise their games this season without interruption.
But there could be a few challenges along the way.
The Guardians are one of the 14 teams. They have a RSN with DSG, the Sinclair-owned subsidiary that operates Bally Sports, which runs through 2027. DSG, according to reports, could file for bankruptcy in the near future, which could hurt revenues for almost half of MLB’s 30 teams.
The regular season is scheduled to start on March 30, but word on DSG’s bankruptcy could come before that.
MLB prefers that DSG conducts its business and pays its clients as usual. But it is skeptical that will happen because of the amount of debt it’s carrying and has prepared contingencies.
Bloomberg reported that DSG is trying to restructure $8.6 million in debt and may not be able to make a $140 million interest payment by mid-February. If that happens, they would have a 30-day grace period before bankruptcy talks become serious.
After the 30-day grace period DSG still may be able to control a team’s RSN, but if it is unable to pay the team — teams are paided on different schedules during the season — the team/MLB could get their TV rights back.
“This is a situation we have been monitoring for a long time,” said Noah Garden, MLB chief revenue officer. “We have been contingency planning to ensure that no matter what happens with the RSNs, fans will be able to continue watching their favorite teams in their local market.”
Besides the Guardians, DSG holds RSNs with Arizona, Atlanta, Cincinnati, Milwaukee, Kansas City, Detroit, Minnesota, Los Angeles Angels, St. Louis, San Diego, Tampa Bay and Texas. It also has a minority stake with the Cubs’ Marquee Network and Yankees’ Yes Network.
The Guardians receive between $47 million and $52 million a year from their RSN. It is a critical source of income for them.
If DSG is unable to pay teams, MLB is prepared to step in and fulfill fans’ expectations by producing and delivering games on TV and digitially. MLB has been live streaming games since 2002, and its digitial platform should allow teams to broadcast games as scheduled.
MLB Commissioner Rob Manfred told the Associated Press on Friday, “I think you should assume that if Diamond doesn’t broadcast, we’ll be in a position to step in. Our goal would be to make games available not only within the traditional cable bundle but on the digital side, as well.”
There could be a few glitches because so much would go into handling that many games. In the 2022 season, however, MLB.TV registered over 11.5 billion minutes watched by fans. Five of the most watched games ever took place in 2022. MLB certainly has the infrastructure to do this if DSG has to punt.
A seismic change like that may even lead to teams reaching a broader audience because the blackout rules could change to allow fans more access via direct-to-consumer streaming services instead of being tied to cable. That’s what kind of revolution is percolating right now with DSG, its MLB clients and the league.
MLB, in preparation for this possibility, hired Billy Chambers for the newly created position of Executive Vice President, Local Media. Chambers worked for Sinclair when it acquired 21 RSNs from Disney for $10 billion in 2019. He also worked with FOX Sports and was the CEO when it sold 22 RSNs to Disney.
If anyone has a detailed knowledge of this situation it’s Chambers.
Should DSG be unable to pay teams their rights fees, MLB is confident teams would still be paid along the same lines that they have been paid in the past. Distributors would still purchase content (games) from the RSN and that money would go to the teams.
Recently Bally Sports Great Lakes released its spring training and regular season schedules for the Guardians as if everything was normal. But it feels like change is coming.
Names to remember
- Shelley Duncan, who played for the Indians from 2010 through 2012, will manage the Yankees Class AAA Scranton/Wilkes-Barre team.
- LHP Juan Hillman, the Indians No. 2 pick in the 2015 draft, has signed a minor league deal with Washington.
- 1B Joe Naranjo, the Guardians’ first baseman at Class A Lake County in 2022, won a minor league Gold Glove.
- Dom Chiti, former Indians coach and scout, will be the Mets bullpen coach in 2023.
- Ivan Ochoa, who spent six seasons in the Indians minor legue system, is Tampa Bay’s minor league fielding coordinator.
- Wayne Kirby, who played for the Indians from 1991 through 1996, is back as the Mets first base coach.
- Joey Cora, who played briefly with the Indians in 1998, is back as the Mets third base coach.
- Dexter Fowler, who homered off Corey Kluber in the first inning of Game 7 of the 2016 World Series, has retired.
Source: Cleveland
