Speaking to the Baseball Writers Association in Seattle on Tuesday, Major League Baseball Commissioner Rob Manfred said the league's 13 teams under the Bally Sports regional sports networks umbrella have received most of their owed local TV rights fees from Bally's bankrupt operator, Diamond Sports Group.
“Of the rights fees that have come due, I think we’ve collected 94% of those rights fees so far. And that’s really important,” said Manfred, in Seattle to witness the MLB's annual All Star Game and surrounding events. The event was covered by Associated Press.
“We have backstopped clubs to make sure that there isn’t some unforeseen alteration in their revenue, and all that’s designed to put clubs in a position to not have disruption when it comes to the most important side of their business, that is putting a good team on the field," the Commissioner added.
Diamond, a subsidiary of Sinclair Broadcast Group, is currently in bankruptcy restructuring trying to shed $8 billion in debt tied to Sinclair's ill-fated 2019 purchase of 19 erstwhile Fox SportNet channels, later rebranded as Bally Sports.
Diamond is using the leverage provided by Chapter 11 to try to force teams with money-losing contracts to lower their contracted linear TV rights fees and also surrender their DTC streaming rights for not additional cost.
Bankruptcy restructuring allows Diamond to simply walk away from these contracts.
So far, only one Bally Sports constituent, has been banished from the Bally Sports kingdom for failing to agree to these terms, the San Diego Padres.
MLB has worked with the Padres to re-establish their presence on linear pay TV. Manfred said distribution of the new Padres linear channel was "well into the five figures."
The team had been taking in $60 million a season via its Bally Sports contract, and it's unlikely that the MLB's new TV arrangement is compensating for that.
League owners have expressed their willingness to "backstop" the Padres and any other Bally Sports MLB dissonant clubs only for this current season.
Diamond is still negotiating with other teams, including the Arizona Diamondbacks and Cincinnati Reds, to keep them in the Bally Sports fold.
Manfred said the league is ready to step in and help those clubs get their games on TV should those negotiations go south.
“Well before the Diamond bankruptcy, we were kind of on the topic of that part of the media landscape changing,” he said. “Our goal from the beginning has been to make a transition from the current situation into a new model that did two things, number one, increase the availability of our games to fans, and number two, to minimize any financial disruption for clubs.”
