Diamond Sports — the owner of Bally Sports-branded regional sports networks — said Wednesday that it plans to drop all MLB teams from its channels except for the Atlanta Braves.Bally Sports has more than a dozen networks across the U.S. Diamond has reached out to all of the 11 teams on its air — 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 — with amended, proposed contracts, to determine the future of MLB on the networks.A Diamond attorney made the comments before a U.S. bankruptcy judge on Wednesday as part of an update on the company’s ongoing bankruptcy process and attempt at finalizing a reorganization plan.Some of those teams were already slated to see their contracts end this season, and some contracts are not being determined by the bankruptcy process, a Diamond spokesperson said.MLB’s regular season ended earlier this week, and the postseason has already begun. Regional sports networks primarily air regular-season games.“To be clear, rejecting these teams is not our preferred path,” Diamond attorney Andrew Goldman said on Wednesday. “Our preferred plan is to bring as many teams into the reorganized [company’s] fold as possible.”He added the company is still in negotiations with the individual clubs, but its discussions with MLB’s Commissioner’s Office have ended.MLB’s attorney James Bromley on Wednesday told the bankruptcy judge it was “unfortunate we are being sandbagged this way,” and added that “some of our clubs are being left out in the cold again.” A spokesperson for MLB declined to comment.Goldman said Diamond had warned the league about this outcome in August, noting it was a possibility if the MLB rejected Diamond’s latest proposal.For decades, the regional sports networks were a lucrative business model for the teams and leagues, and networks paid high fees to air games. But they have suffered as cord-cutting has hit the pay-TV business, leading to fewer subscribers.This — and the heavy debt load Diamond has contended with since Sinclair acquired the business from Disney in 2019 — led the owner of the largest portfolio of regional sports networks to file for bankruptcy in March 2023.Diamond’s lawyers have been trying to reset those rights payments to reflect so-called market rates. As a result, Diamond has rejected contracts, seeing a number of teams find new TV and streaming homes.In June, the NBA and NHL voiced concerns about the viability of Diamond’s business, particularly ahead of the seasons that will begin this month.A Diamond attorney said Wednesday was a “watershed moment” for the company as it was able to file an amended reorganization plan. While Diamond aims to exit bankruptcy protection, the possibility of winding down the business still exists. Still, attorneys said the company promised the NBA and NHL they would honor their contracts through the end of the season.“Today marks an important step forward for Diamond with the filing of a baseline plan to enable us to emerge from bankruptcy as a viable, go-forward business before year-end,” a Diamond spokesperson said in a statement. “We have delivered proposals to and remain in discussions with our MLB team partners around go-forward plans. We firmly believe that through our linear and digital offerings we have created the best economic and fan-friendly engine for all of our team partners.”Diamond’s tussles with MLB began before the filing.Diamond had been pushing unsuccessfully for some time to hold the streaming rights for all MLB teams that air on its networks.Last year, the San Diego Padres and Arizona Diamondbacks left their Bally Sports networks, and the league began producing and distributing the games on pay-TV bundles and MLB TV instead.
© 2024 CNBC LLC.