MLB Wants Answers as Diamond Bankruptcy Case Rounds Home (original) (raw)

In what is likely to be the final court hearing before a bankruptcy judge rules on the fate of Diamond Sports Group next month, Major League Baseball took another step toward ending its long association with the company’s RSNs.

Midway through Wednesday’s hearing in front of the U.S. Bankruptcy Court for the Southern District of Texas, Sullivan & Cromwell attorney James Bromley said MLB was eager to work out a deal that would expedite the process of officially terminating Diamond’s legacy baseball deals.

Bromley, who serves as outside counsel for MLB, said he’s discussed the matter with WilmerHale attorney Andy Goldman, who reps Diamond. Bromley told Judge Christopher Lopez that he hoped to work out a deal that might allow the exiting clubs “to terminate or end or reject [their RSN agreements] prior to the confirmation hearing, so that we can open up the opportunities for those clubs to make alternative arrangements for the 2025 season.”

That conclusive hearing is set to take place on Thursday, Nov. 14.

Bromley specified that the teams under consideration are “clubs that will not be going forward, [including] joint-venture clubs.” Among the teams that are co-owners of their in-market TV channels—and as such are technically not involved in Diamond’s bankruptcy case—are the Cincinnati Reds, Los Angeles Angels, Kansas City Royals, Miami Marlins and St. Louis Cardinals.

MLB’s bid to hustle the last of its Diamond-affiliated clubs toward the exit was vocalized the day after the league announced that it would assume in-market media production and distribution for the Cleveland Guardians, Milwaukee Brewers and Minnesota Twins starting next year. On Oct. 2, Diamond informed the court that it plans to void nearly all of its MLB contracts, with an eye toward retaining a standalone rights deal with the Atlanta Braves.

Separately, the Texas Rangers on Tuesday confirmed that they were leaving Bally Sports Southwest in order to try their luck on their own. Last year’s World Series champs recently rejected a one-year extension with the RSN when Diamond confirmed that it could not pay the 2025 rights fee upfront, and in full.

Aside from the four teams that bolted the stable Tuesday, Diamond continues to negotiate one-off renewals with the other seven clubs. The company is said to be particularly interested in renegotiating its deal with the Angels, although at a rate that will come in well under the $125 million fee LA commanded last season. It may also look to re-up with one or more of the clubs that had signed over their digital rights to Diamond in the pre-bankruptcy years, a group that includes the Detroit Tigers and Tampa Bay Rays.

If none of the other MLB teams elects to stick it out for one final year, Diamond will head into its post-bankruptcy future without the luxury of a full-spectrum summertime slate. Baseball’s 162-game season has long been the steak and the sizzle for the RSN model, and went a long way toward justifying the networks’ nosebleed carriage fees. While it’s not unheard of for an RSN to function without an MLB partner, the precedent doesn’t favor such a scenario. (The largely baseball-free Bally Sports New Orleans saw the bulk of its live pro sports programming evaporate in August, when the NBA’s Pelicans cut ties with the RSN.)

The Rangers were among Diamond’s most well-compensated MLB partners, commanding an annual rights fee of 111million.AspartofDSG’songoingeffortstokickthebaseballhabit,thecompanyhasslasheditsMLBbudgettothebone;inadocumentfiledtothecourtonMonday,Diamondrevealedthatithasjust111 million. As part of DSG’s ongoing efforts to kick the baseball habit, the company has slashed its MLB budget to the bone; in a document filed to the court on Monday, Diamond revealed that it has just 111million.AspartofDSG’songoingeffortstokickthebaseballhabit,thecompanyhasslasheditsMLBbudgettothebone;inadocumentfiledtothecourtonMonday,Diamondrevealedthatithasjust16.42 million in outstanding obligations left on the books. By comparison, DSG owes its remaining NBA partners 253.14millionfortheentire2024–25season,whileitsNHLrightswillcostit253.14 million for the entire 2024–25 season, while its NHL rights will cost it 253.14millionfortheentire2024–25season,whileitsNHLrightswillcostit134.95 million over the same span.

Should Diamond fail to get clearance from the court to forge ahead under its new organization plan, it will pay partners from both leagues a reduced fee of between 64.7% and 74.2% of the original book balances. Thus, should DSG be directed to liquidate its assets, the NBA teams would receive a sum within a range of 163.73millionand163.73 million and 163.73millionand187.92 million, while the former NHL partners would get 87.29milliononthelowendandupto87.29 million on the low end and up to 87.29milliononthelowendandupto100.18 million on the high end.