Bally Sports RSNs Are Reportedly Preparing For Bankruptcy

[Jimbo]

And what happens for those that actually DO follow thier Teams (not necessarily in Market) ... ?

I don't follow the Tiger, Indians or Reds any longer ...

 

[Bruce]

Judge already ruled in favor of MLB-

The Minnesota Twins, Arizona Diamondbacks, Cleveland Guardians and Texas Rangers have won their case against Diamond Sports Group in U.S. Bankruptcy Court, with the judge ruling in their favor to receive full payment for the 2023 season as is directed in the previously agreed-upon contracts.

"Maybe market forces change terms of deals. But market risk is always there, inherent in every contract," said U.S. Bankruptcy Judge Christopher Lopez, making his ruling just before 6:40 p.m. CT Thursday – the second day of testimony in the Houston courtroom.

This is not good news for Diamond, either in reducing the contracts or granting streaming rights they do not have, that was Diamond’s hope that Bankruptcy Court would give them leverage against MLB, based on today’s ruling, that hope is gone.

https://www.si.com/fannation/bringmethesports/twins/judge-orders-bally-sports-operator-to-pay-twins-in-full-what-now

 

[Mr Tony]

Sweet. I hope Ballys doesn’t pay and the Twins can be available alacarte like the Padres are.

 

[Bruce]

found more-

Judge: "That's why I think the contract rate is the right answer here.""The debtors aren't entitled to DTC rights without MLB's approval."


View: https://twitter.com/arizonaslaw/status/1664414303129309185

Diamond cannot reduce rights fees and cannot get streaming rights without approval from MLB

I always said this will end up a Chapter 7, that possibility is now stronger.

 

[Bruce]

Sweet. I hope Ballys doesn’t pay and the Twins can be available alacarte like the Padres are.

Twins contract was up the end of the year anyways, doubtful the RSN will make it till then.

 

[Bruce]

And more-

Lopez added that if he rewrites contracts for Diamond, other parties in bankruptcy could ask for similar requests. He said times change and mentioned it “costs $18 to get a sandwich in downtown Houston” while referencing the impact of inflation and supply chain issues.

MLB Wins Ruling in Diamond RSN Bankruptcy Fight

U.S. Bankruptcy Judge Christopher Lopez on Thursday sided with Major League Baseball in its ongoing dispute with Diamond Sports Group. The ruling came after a contentious, multi-day hearing in…

www.sportico.com

 

[SamCdbs]

That's crazy. It's like "honey, since they won't show the Giants here on TV, let's hop in the car and drive 550 miles to see them in person". Who does that? What is the point of that blackout?

The only real "blackout" that exist in sports to protect the local live gate, AFAIK, that remains is the Indy 500.

The term "blackout" is really unfortunate for what this is. No game is really "blackedout". Rather each game is sold at the price it can bear in the market.

Out of market games, sold in the old days at MLBEI, and now as mlb.tv, are not very valuable. There are not a lot of Royals fans in New Jersey, or Reds fans in New Mexico, or Blue Jays fans in Nebraska. There is already plenty of out-of-market baseball for "free" on linear TV (TBS, ESPN, FS1, Fox, MLBN) anyway. So these games, the costs of production already fully paid by the in-market customers, are tossed up for a relative pittance (its free with T-Mobile) and there you go.

In-market games, as much as a few here would like not to believe this, are incredibly valuable. The single highest rated thing in a local market most all summer is the local baseball team. Now, in a 200, or 2000, channel world, this is still 3 or 4% of people, but it is still the single most popular thing on. This makes these game very valuable.

So you can get other people's baseball teams for a little, because they are not worth much where you live, but must pay a lot for the valuable product. Your team.

BTW, OF COURSE, the buy rate for in-market streaming is low. People that don't like sports and don't like the home team, SELF SELECTED out of linear TV and their local team. Expecting a big buy rate, which is Bally's fantasy, is like expecting ST or Paramount Plus to ever be profitable.

Now, that said, is baseball's position perfect? No.

- The idea that every single square inch of the USA and Canada is "local" to a team is not true. Some places, particularly in the west, are simply not.

- The crazy quilt of overlapping claims, which date back before the RSNs, into the 1970s, were borne of each team just claiming a region and if they over-lapped, they over-lapped. Many are indefensible. The Reds claim parts of Mississippi. The Ind..umm Guardians claim parts of Kentucky. The Pirates claim places that get DC TV as their local stations. Some places "belong" to six teams. Two commissioners have promised to "fix" this. None has. None will.

- Baseball's fundamental mistake, of course, was in the transition from MLBEI, which was a supplement for people with linear TV, who had thus already paid for the RSN and thus their fair share for local baseball, to mlb.tv, which, foolishly, they sell standalone, allowing people to watch other people's teams for way less money than their own.

- Because out-of-market games are fully paid in terms of production and other costs, by the in-market fans, whatever is made on them is "gravy". Extra. The question of how such games would ever be produced in the first place, for the handful of out-of-market fans, is unanswered, and unanswerable.

 

[Bruce]

Going thru the Court’s decision on twitter, they have until July 1 to pay in full the Angels, Braves, Cardinals, D-backs, Guardians, Padres, Rangers, Reds, and Twins.

If not paid, they are free to go.

The Brewers, Marlins, Angels, Royals, and Tigers are paid up and if I remember correctly, those are the teams they have streaming rights for.

I fully expect this to turn into a Chapter 7 since they do not have enough cash to pay the NBA and NHL teams.

Usually out of Bankruptcy, companies get a loan since they cleared a lot of that debt in Chapter 11, but I really doubt they would be able to get one in today’s world.

 

[dishdude]

Going thru the Court’s decision on twitter, they have until July 1 to pay in full the Angels, Braves, Cardinals, D-backs, Guardians, Padres, Rangers, Reds, and Twins.

If not paid, they are free to go.

The Brewers, Marlins, Angels, Royals, and Tigers are paid up and if I remember correctly, those are the teams they have streaming rights for.

I fully expect this to turn into a Chapter 7 since they do not have enough cash to pay the NBA and NHL teams.

Usually out of Bankruptcy, companies get a loan since they cleared a lot of that debt in Chapter 11, but I really doubt they would be able to get one in today’s world.

Infuriating that Sinclair was able to spin this division off and stiff all their creditors.

 

[Bruce]

Infuriating that Sinclair was able to spin this division off and stiff all their creditors.

Yep, they were loaned $10 Billion to buy the RSNs, I believe a little over $8 billion still owed, after they go Chapter 7, there are no real assets left, channels will just go away, no buyers out there for them since what is going on with cord cutting, even if they were purchased, all the sports team will have already left.

 

[NashGuy]

While the MLB, NBA and NHL may continue to see increases in how much they can get for nationally televised games carried on national channels and streaming services, I think the reality is that they're going to have to accept less money for all those local games, i.e. the vast majority of the schedule that were on RSNs during cable TV's heyday. Sure, the leagues should put those local games on their streaming platforms (e.g. MLB.tv) but there's no price they can set that will end up giving them the same amount of revenue they got when the RSNs were carried in cable TV packages subscribed to by 75% of US homes. The bubble has burst.

 

[Bruce]

Found this on Reddit-
The Debtors shall pay such amounts within five business days of the entry of this
Order.

 

[Mr Tony]

Bally Sports Only Has a Few Days Left Before It Could Lose TV Rights to 9 MLB Teams | Cord Cutters News

It has been a busy week for MLB teams. Earlier this week, Bally Sports’ parent company Diamond Sports, let the deadline to pay the Padres pass and decided to return the media rights back to the MLB. Now Bally Sports has been ordered to make full payments to nine MLB teams that it owes money […]

cordcuttersnews.com

Update: there are reports that the Braves have been paid.

 

[Bruce]

Diamond/Sinclair’s Lawyers has asked for ClarfiIcation-

https://i.redd.it/7jlgk9g5co4b1.png

 

[Bruce]

From Reddit-

Diamond Sports owner of Bally Sports filed with the bankruptcy court to reject the Diamondbacks contract effective June 30 with a hearing set for June 29 at 3:30 PM CT as it is "significantly unprofitable and is projected to be increasingly unprofitable in subsequent years." Diamond Sports filed its' monthly operating reports last night which showed Bally Sports Arizona lost about $3 million in May. In comparison Bally Sports Southwest (aka Texas) and Ohio each made a profit of about $4 million and North made a profit of only $15,000 in May.

Based on what that says about Bally North, looks like the Twins will be next on the chopping block after Arizona.

 

[Yespage]

Wait, Ohio made 4 million and they want to drop it?

 

[Bruce]

Bally Sports Arizona is done for.

Diamond was negotiating with the Diamondbacks to lower the amount and on-line rights, but once it was final the Suns were leaving (and the Arizona Coyotes 10 year contract is up next year), all talks stopped ( which properly makes the MLB Commissioner happy).

https://sports.yahoo.com/diamond-sports-dumps-d-backs-122653515.html

 

[SamCdbs]

Diamondbacks channel up and running on DirecTV 686-3.

Listening to the SBJ podcasts on the subject, apparently DirecTV will have to ask the judge if it can drop the, now content free until October, BSAZ channel. I cannot see DirecTV paying much for just the Coyotes (who need to give it up and move to Houston, but that is a story for another day).

I don't know anybody who has come to grips with reality in this deal.

- Manfred says the owners are going to make up 80% of the losses from deals that move away from Sinclair. Bluntly, there isn't that kind of money. The Diamondbacks were getting $80M/year. The HIGHEST rated game last year was a 5.1. The average is just over 3. Like most local baseball, that is the highest rated thing on TV most nights, all summer, but its still just 3% of people. Arizona has 7.15M people, so that works out to 2.6M households. Lets be generous and go with 4%. That is 104K. 104K x $120/year just over $12M. Toss in a little for other places the Diamondbacks claim to be the home team (they overlap with other teams in southern Nevada, New Mexico, and Utah), and maybe that is another mil or so. So lets go with $13M. 80M -13M = 67M of which 80% is $53M. Of course they make a little from the ads, but most baseball game local ads are car dealers and ambulance chasers. The rate card for OTA TV in Phoenix would work out to maybe $10K/minute. So a not really that great source of income, but lets go with it and that is maybe $10M. So Manfred needs $43M. And that is just for the one team. I did the math for San Diego and its even worse. There just ISN'T that kind of money out there.

- Sinclair seems to still think that if it could only get a la carte rights, everything would be OK. See the math above. A buy-rate of 5% would be a blockbuster. Its going to in reality be something like 3%.

- The union, so-called, is convinced that the owners are somehow making this secret money and they are getting done in. They aren't. But my knowing that doesn't change their perception. The gravy train for the players is running out of coal.

Sad to say, the days of being able to enjoy your local baseball team at a fair price every night, the plurality thing that most TV watchers want to do every night, is too.

 

[savarese04]

I think as we start to move away from the RSNs, we'll see cost cutting in production and filler content, which will help with that $43M number. For instance, when I tune into my local team, there's a pre-game show for an hour, then a 30 min warmup show that leads into the game, then a 30 min postgame, followed by a 1 hour deep analysis show.

When you move to streaming, none of that extra fluff is going to get aired, much less viewed. Even as an avid and super knowledgable fan, I skip the early stuff (baseball pregame analysis is dumb*), show up 15 minutes into the warm up show just to get the lineups and important info, watch the game, watch the on-field interviews, and then I'm out (post game rehash of what i just saw is also dumb and, despite what beat writers believe, I don't care to hear the same soundbites from the manager every game). I expect there are a lot of people doing the same and when you don't have to prop up an RSN with additional content, I foresee almost all of this getting cut.

In general, I think sports production has gotten out of hand anyway with the ridiculous hype videos, Carrie Underwood lead-in concerts, and other fluff. None of this improves viewership one iota and all it does is drive up costs. You'd think these money-hungry, profit-at-all-costs exec teams would have figured this out already.

*Baseball is just so much different than football and basketball when it comes to in-game strategy.

 

[SamCdbs]

I think as we start to move away from the RSNs, we'll see cost cutting in production and filler content, which will help with that $43M number.

The pre game content, and the filler, is produced by the RSNs, not the teams.