Major League Baseball warned America’s biggest local broadcaster of professional sports games that it must televise hundreds of upcoming baseball games — and pay the related fees — even though the company is in bankruptcy.
(Bloomberg) — Major League Baseball warned America’s biggest local broadcaster of professional sports games that it must televise hundreds of upcoming baseball games — and pay the related fees — even though the company is in bankruptcy.
Two weeks before baseball season starts, Diamond Sports Group has not said whether it will televise games for the 14 teams it has contracts with, MLB attorney James Bromley told the judge overseeing Diamond’s bankruptcy case. Through its Bally Sports brand, Diamond is obligated to broadcast an average of 150 games for each of those teams, Bromley said during a court hearing held by video on Thursday afternoon.
“We are very concerned because opening day is just two weeks away,” Bromley said. If Diamond fails to pay any of the fees associated with the games, MLB will ask US Bankruptcy Judge Christopher Lopez to take action, Bromley said.
Diamond has the money to broadcast all the basketball and hockey games left for the year under its agreements with those sports leagues, company lawyer Andrew Goldman said during the hearing. He didn’t say whether the company plans to broadcast the baseball games.
Diamond filed bankruptcy on Tuesday in Houston, with a proposal to cut more than $8 billion in debt by giving ownership of the company to creditors.
Wiped Out
Diamond is owned by Sinclair Broadcast Group Inc., which loaded up on debt to buy 21 regional sports networks from Walt Disney Co. in 2019 for $9.6 billion. Sinclair’s ownership stake is likely to be largely wiped out in bankruptcy, Diamond lawyer Brian Hermann said in court.
The company’s channels show thousands of Major League Baseball, National Basketball Association and National Hockey League games to fans from Detroit and Phoenix to San Diego.
Diamond said it plans to restructure while continuing to broadcast live sports to fans. The company borrowed more than $600 million last year to build a streaming service, because so many fans have abandoned cable television.
Regional sports networks are under financial pressure as more people cancel their cable-TV service, depriving them of a key source of revenue. Cord-cutting has hurt Diamond’s revenue and undermined its ability to pay its debt load.
Diamond planned to stake its future on its own direct-to-consumer service, which launched last year.
The company complained in court that its new service faces resistance from Major League Baseball, which denied the company the rights to stream games from nine of the 14 teams in Diamond’s portfolio. MLB is considering showing games to local fans on its own platforms, Goldman said.
The case is Diamond Sports Group LLC, 23-90116, U.S. Bankruptcy Court for the Southern District of Texas.
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