Diamond Sports Files for Bankruptcy. Will This Affect Fans Access to Sports Broadcasts?
Diamond Sports Group, which owns almost two dozen regional sports networks, has filed for bankruptcy. The filing could have major ramifications for how fans watch sports games.
Operating under the name Bally Sports, Diamond is the largest distributor of live sports in the entire country. But the company took on almost $10 billion dollars of debt to purchase multiple regional sports networks just as the rate of cord-cutting began booming across the country. The company filed a chapter 11 for restructuring just four years after its expansion.
Diamond operates networks for over forty teams in the NBA, NHL, and MLB. There is a bit of urgency for all three leagues, as the NHL and NBA head into their playoff seasons while baseball is primed to kick off it’s 2023 opening day in just a few weeks.
David Preschlack, Diamond’s CEO, released a statement last week noting that the Diamond “will continue broadcasting games.” MLB echoed the statement, saying, “Despite Diamond’s economic situation, there is every expectation that they will continue televising all games they are committed to during the bankruptcy process.” But MLB hedged a bit. “Major League Baseball is ready to produce and distribute games to fans in their local markets in the event that Diamond or any other regional sports network is unable to do so as required by their agreement with our Clubs.”
How exactly this would work remains uncertain. MLB may offer online streaming through its MLB.TV app. But producing games on a cable channel would require negotiation with the cable companies. Moreover, MLB would have to hire hundreds of production staff employees to put together broadcasts for teams across the country. How long this would take to get operationally independent remains unclear.
ESPN reported that, as we get closer to the start of the regular season, things could begin to really heat up. The rights fees owed by Diamond to MLB teams is coming due imminently. If Diamond can’t pay, that could trigger breaches of contract and potentially free teams of obligations to the broadcast company.
Typically, breach of contract cases would still require a court hearing to make a final determination. Teams or MLB might be reluctant to start airing games with new broadcast partners out of fear of inviting counter suits by Diamond. Diamond itself may just be able to continue airing games even without paying teams for the right’s fees if there is pending litigation.
So what does this mean for the future? In the short term, it doesn’t seem like fans will miss any games. There’s too much money at stake for someone, whether it is Bally Sports or the league itself, not to step in and actually broadcast the game. While the quality may not be what fans have come to expect, in the event that MLB, NBA, or NHL has to step in and construct production teams on the fly, fans will undoubtedly still be able to watch.
In the long term though there is a lot in flux. Leagues may look to keep more control of the broadcasting of their products. As more and more fans turn to streaming over cable, the leagues may just decide to broadcast games on their own through their own apps.