Baseball fans in 12 markets were barely into the season when, on May 1, Comcast pulled the plug on the struggling Ballys Sports and parent company Diamond Sports Network, which is in Chapter 11 bankruptcy. The date marked the end of Comcast’s carriage agreement. The two sides finally agreed and again broadcast Bally Sports games on August 1. The gap essentially blacked out half of Major League Baseball’s season for 12 baseball teams and impacted the WNBA season’s first half for five teams. While some teams were already in the playoffs in May, the network blackout affected the carriers for 12 NHL teams and 15 NBA teams, which will begin their seasons this fall. Both these leagues have new contracts recently negotiated that stabilize their seasons.
The new agreement
The agreement allowing Bally Sports regional sports networks (RSNs) to return to Comcast’s broadcasts is crucial for Diamond Sports Group as they navigate bankruptcy proceedings. The main point of contention was how the Bally Sports RSNs would be a tiered add-on in Comcast’s cable offerings. Ultimately, Comcast won the dispute, and the channels will be included in the “Ultimate” tier, which is about $20 per month higher than the basic tier.
This deal is significant for Diamond Sports Group as it helps stabilize their operations and could improve their chances of emerging from bankruptcy. However, the broader landscape of sports broadcasting is evolving, with teams and leagues exploring new streaming alternatives.
Are regional sports networks dying?
A powerhouse since the rise of cable in the 80s, regional sports networks (RSN) were part of basic packages. Teams sold RSNs TV rights, which, in turn, were sold to providers Comcast and DirecTV. In the golden days of RSN, this was a goose laying the golden egg that handsomely paid owners and increased player salaries. As previously discussed, the Diamond Sports Group took over the broadcast rights to 42 professional sports teams on 21 networks in 2019 in a $10.6 billion deal to take over RSNs from Disney while also absorbing a ton of debt. Since then, RSN revenue has tanked as viewers cut cable for other options.
Ballys is trying to find its footing in bankruptcy, but some teams are not waiting around. The Dallas Stars and the Anaheim Ducks joined together to create a streaming app for the upcoming season. Similarly, the Phoenix Suns and the Utah Jazz created their own apps to broadcast their games and provide other exclusive content. The Yankees created their RSN some years ago and began to offer apps last year, netting the club $143 million in 2023.
What about baseball?
Already burned once, Major League Baseball (MLB) has expressed significant concerns over the ongoing uncertainty regarding the 2025 baseball season due to Diamond Sports Group’s prolonged bankruptcy proceedings. Diamond holds contracts with nine MLB teams for 2025 and three more whose contracts expire after this season. The uncertainty affects not only which channels will broadcast the games but also the financial planning of these teams, particularly in terms of free agency spending.
Bankruptcy court had approved Diamond’s deals with the NBA and NHL, which require Diamond to exit bankruptcy by April 1, shortly after the baseball season starts. However, MLB wants certainty well before that date to plan for the 2025 season.
MLB teams’ local TV revenues, which range from 12 to 32% of their total income, are crucial for financial planning. The uncertainty has already impacted free agency spending, and MLB fears it could worsen if not resolved promptly. While Diamond has paid about 90 percent of what it owes MLB teams for the 2024 season, MLB insists on more transparency and quicker resolution to avoid further financial disruptions.
In other words, MLB is pressing Diamond for faster resolution of its bankruptcy issues to ensure financial stability and proper planning for the 2025 season, with potential legal actions if timely solutions are not achieved.