Diamond Sports and MLB might be reaching the end of the line together

The owner of Bally Sports Networks said in court that they’re not going to sign deals with most of the MLB teams they’ve been carrying.

The ongoing saga of Diamond Sports vs. MLB came to a head in bankruptcy court Wednesday. Here’s what happened, per Evan Drellich in The Athletic:

Diamond Sports Group appears to be threatening to drop virtually every MLB team in its portfolio besides the Atlanta Braves, barring renegotiation of the deals on more favorable terms. The court hearing on Wednesday where that message was delivered left the baseball television world in some chaos.

Andrew Goldman, a lawyer for the broadcasting company, said during a federal bankruptcy hearing that Diamond plans to assume “a single telecast rights agreement, that of the Atlanta Braves. All of the other teams, all of Major League Baseball’s other agreements, will be rejected under the plan.”

Drellich goes on to explain that some of those teams might, emphasizing might, still re-up with Diamond for 2025. On the other hand, maybe not, based on this statement by a MLB attorney:

Jim Bromley, a lawyer for MLB, said the league had no idea Wednesday’s news was coming.

“We had no information about what is being done,” Bromley said. “It’s unfortunate that we’ve been sandbagged in this way.”

An ESPN.com article has a bit more detail on the individual teams involved:

Diamond announced the decision Wednesday in court, saying it would continue carrying Atlanta Braves games next season.

Seven of the remaining 11 teams — the Cincinnati Reds, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, St. Louis Cardinals and Tampa Bay Rays — were under contract with Diamond for 2025. Those teams will have to either negotiate a new deal with Diamond or find a different operator.

The other four teams carried by Diamond this season — the Cleveland Guardians, Milwaukee Brewers, Minnesota Twins and Texas Rangers — had deals with Diamond that expired after the 2024 season.

And there’s also this, from the ESPN article:

The Angels, Reds, Cardinals, Royals and Marlins are on joint-venture agreements, which would trigger legal action if Diamond drops its agreements.

Oh. As if there hasn’t been enough legal action between Diamond and MLB already.

Back in May, a Drellich article stated:

Commissioner Rob Manfred and some of the sport’s owners are more seriously talking about nationalizing baseball’s TV rights than ever before. Not because of relocation, but because of cord-cutting, the failure of some traditional regional sports networks, and the simultaneous battle for streaming supremacy waged by Netflix, Amazon and other streamers that has left sports leagues and rights holders in a chaotic reformation.

Some baseball owners and executives, mostly in smaller markets, believe the best way to grow media revenues over the long haul is to centralize the deal-making, and from there, to potentially sell all 30 teams’ regular-season broadcasts as one streaming package. Others in the game, particularly those whose teams make the most money, are vehemently opposed to surrendering their power over their rights.

I realize that’s a lot of quoting of other sources, but I think you need to read all that to understand what’s happening here. The teams that have been carried by Diamond noted here, as happened to the Padres, Diamondbacks and Rockies, are likely going to have to have some sort of streaming option with either a local over-the-air broadcast or some sort of local cable carriage. The streaming options in San Diego and Phoenix are charging $19.99 a month, the same amount you pay if you have the Marquee Sports Network streaming option here in the Cubs market territory.

The thing is, even with any fans of teams dropped by Diamond having to do something like this to watch their team’s games, that’s not going to make up the revenue lost by the departure of the RSN rights fee. Here’s just one example of that:

So, okay, fine, teams will stream their games, and fans in-market can buy the streaming product, and out-of-market fans can still see the games via MLB.TV.

But:

Oh. And I am certain the Cardinals won’t be alone in doing that.

This is what happened to the Twins this year, as I detailed in this article here last November, and this is the conclusion I drew:

But if teams are going to start cutting payroll, we’re going to wind up with an even starker divide between wealthy, high-payroll teams and clubs that have to cut as the Twins are reportedly going to do. Further, as I have noted previously, this very likely will lead MLB to ask for a salary cap in the next CBA negotiation. You obviously know how far that’s going to go with players, and it will likely lead to another lockout.

And now it’s not just one team, the Twins — it could be as many as 11 teams, more than one-third of the league.

We are also in a situation here in Chicago where the new channel Chicago Sports Network, carrying the White Sox, Bulls and Blackhawks, is not yet carried by Comcast/Xfinity, which covers about 55 percent of homes in the Cubs/White Sox combined market territory. So that’s revenue the Sox aren’t getting, not that they were going to be big spenders in 2025 anyway.

However! It was reported over the summer that Comcast/Xfinity’s deal with Marquee Sports Network was going to be up at the end of the 2024 season:

As Cubs President of Business Operations Crane Kenney told 670 The Score back in May, the Cubs’ carriage deal between Marquee and Comcast ends in September:

“On the one side, it’s a true serious moment on the distribution side. On the other side, the programming side, Marquee, our friends there, they just won RSN of the Year nationally for a second straight year in a row. They’ve won (lots) of Emmys. They’re doing a great job on the programming side, but I think distribution is going to be a challenge. And I’m sure you’re going to be asking me … in September, you’re going to go, ‘Hey, what’s going on now?’ Because it’s going to be bumpy.”

Bumpy, perhaps. What seems likely to happen, if there isn’t a standoff like Diamond Sports had with Comcast for most of this season, is some sort of last-minute deal that will keep Marquee on Comcast/Xfinity systems — but bump it up to some sort of premium tier that will cost fans more. As they did with these other markets, Comcast likely gives a bit of coverage free for a while, but by the time next baseball season comes around, if you are a Comcast subscriber, you’re going to pay more for Marquee.

What happens next is anyone’s guess — here’s mine from that article posted last July:

I suspect you’re guessing what comes next here: A loss of revenue to the Cubs. With this sort of distribution, Marquee isn’t going to be able to bring in the kinds of cash that it’s bringing to the Cubs now. That’s been estimated by some to be about $100 million a year. With lower revenue could come a reduction in team payroll. That happened to the Twins this year, as I noted in this BCB article last November. The Twins had about a $156 million payroll in 2023, That’s dropped to $129 million this year, though the Twins have been able to put a playoff contender on the field anyway.

The bottom line is this: Commissioner Rob Manfred has said on quite a number of occasions that he would like to see some sort of national distribution of local team broadcasts, and with this Diamond Sports action we could be headed in that direction. That would accomplish one good thing for fans — no blackouts. But it would also likely produce far less revenue for MLB and its teams than the old RSN model. Just look at the way streaming providers like Disney, Paramount and Netflix have been hemorrhaging money over the last few years. If baseball goes to such a broadcast model, they would not be immune to that sort of thing.

Fasten your seat belts, baseball fans. The next few years are going to be a bumpy ride.