Media

Judge Sides With MLB, Orders Diamond Sports to Pay Up

At end of a bankruptcy hearing, judge rules that four MLB teams are entitled to full compensation
Saddled with $8B in debt, Diamond Sports Group filed for bankruptcy protection in March.

Jun 01, 2023 | 08:52 pm

UPDATED Jun 02, 2023 | 02:50 pm

Bally Sports

The steep descent of regional sports television over the years wasn’t enough for Diamond Sports Group to escape paying full freight to carry four MLB teams.

After a two-day hearing, Judge Chris Lopez ruled Thursday night that the Texas Rangers, Arizona Diamondbacks, Cleveland Guardians, and Minnesota Twins are entitled to all the money promised in their respective broadcast agreements.

“Market forces alone shouldn’t be the only evidence that something is clearly unreasonable,” Lopez said during his ruling.

Lopez had previously ruled that the four teams were entitled to partial payments as their games continued to be broadcast on DSG’s Bally Sports RSNs. Now, DSG will have to come up with the rest, although Lopez didn’t set a deadline for payment.

The most significant developments of the hearing that spanned about 20 hours were the negotiations between Diamond Sports — a Sinclair Broadcast Group subsidiary — and MLB over the last several months.

In January, MLB offered to purchase the rights for the 14 teams broadcast on Bally Sports RSNs. A DSG executive said it only amounted to $60 million, although MLB Commissioner Rob Mandred testified Wednesday that the full value was around $400 million.
DSG attempted to secure direct-to-consumer streaming rights to all 32 clubs with a promise to fully pay all the clubs it has deals with through 2026.

Those offers didn’t go anywhere, but Lopez encouraged the two sides to work out a resolution.

“I am not asking the parties to agree,” Lopez said. “I’m asking the parties to talk. That’s my request. I’m not going to force you in the room, but I am asking you to talk.”

DSG filed for bankruptcy protection in March as it seeks to renegotiate $8 billion in debt as subscriber losses — especially on cable and satellite — snowballed in recent years.

Sinclair purchased the former Fox Sports RSNs for $10.6 billion in 2019. Disney had acquired the RSNs as part of its purchase of Twenty-First Century Fox, and regulators forced Disney to sell the RSNs.