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Diamond Sports Group Bypasses Payment To Padres, MLB To Take Over Local Broadcasts


Diamond Sports Group, the corporation which operates the Bally Sports regional networks responsible for nearly half MLB’s local broadcasting deals, has informed the Padres it won’t make its scheduled payment to the club. John Ourand of the Sports Business Journal was first to report the news. Diamond had initially missed a payment a couple weeks ago and had until today to make up the debt if it wished to keep its broadcasting rights.

By declining to do so, Diamond forfeits in-market broadcasting for Friars’ games. Beginning tomorrow, the rights will revert to Major League Baseball. Both Ourand and Alden González of ESPN report that the league will stream Padres’ games in-market on MLB.TV (free of blackout restrictions) at no cost through Sunday. Thereafter, González reports, they’ll be available in-market on MLB.TV for either $19.99 per month or $74.99 for the rest of the season. In addition to the blackout-free streaming options, MLB is expected to make the games available on various non-Bally cable platforms.

Diamond filed for bankruptcy in mid-March, calling into question its long-term ability to honor any of its broadcasting deals. The company had held onto all of its contracts thus far — it missed a payment to the Reds but salvaged the deal by upholding its commitment during the grace period a few weeks later — making the Padres’ deal the first to fall through.

The Padres’ contract with Diamond runs through 2032, according to Ourand. It’s a $1.2 billion deal which Diamond asserts has proven unprofitable. It will let it lapse as a result; in a statement to Sports Business Journal, the company said “the economics of the Padres’ contract were not aligned with market realities” and excoriated MLB for what it called the league’s “continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights.

Padres’ CEO Erik Greupner provided González with a statement as well. “The Padres are excited to be the first team to partner with Major League Baseball to offer a direct-to-consumer streaming option through MLB.TV without blackouts while preserving our in-market distribution through traditional cable and satellite television providers,” it read in part. “Our fans will now have unprecedented access to Padres games through both digital and traditional platforms throughout San Diego and beyond.

According to both González and Jeff Sanders of the Union-Tribune, San Diego’s on-air broadcasting staff will remain in place. It’s not yet clear whether the pregame or postgame staff might be affected by the shakeup. What is apparent is that access for fans in the San Diego area will be greatly expanded with Bally forfeiting its unilateral in-market broadcasting rights.

To this point, the Padres are the only team for which that is the case. They’re not likely to be the last, however. Diamond’s ongoing bankruptcy case is set for a pivotal hearing tomorrow. Diamond has been paying the Guardians, Reds, Twins, Rangers and D-Backs at lower than contracted rates since filing bankruptcy.

Those clubs are pushing for payment of the overdue rights fees or the severing of those contracts; Diamond has argued for the court to restructure the deals to more closely align with their current market values in light of rampant cord-cutting that has devalued the cable market in recent years. Evan Grant of the Dallas Morning News and Paul Hoynes of each write that league officials aren’t anticipating an official ruling from the court during or directly following tomorrow’s appearance; nevertheless, tomorrow’s hearing sets the stage for a key ruling down the line. In the interim, Diamond will maintain its slate of non-Padres contracts.

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