Major League Baseball continues planning how it will manage individual teams’ media rights reverting to the league if Diamond Sports Group, which owns the Bally Sports regional networks, misses payments ahead of the 2023 season’s start next week.
The San Diego Padres could be the first team impacted, even though it was the Arizona Diamondbacks who are the first team that Diamond missed a rights fee payment toward, according to Sports Business Journal’s John Ourand.
Diamond, which has filed for bankruptcy, will vote internally about whether it will allow a grace period to pay San Diego to elapse. The company could still opt to pay the rights fee.
Why would the Padres become the first team ahead of the D-backs that triggers MLB to head to court in an attempt to obtain their rights?
Diamond already has allowed a grace period to end without making a payment to the Arizona Diamondbacks. Since that original payment was missed before Diamond entered bankruptcy, MLB believes bankruptcy rules make it harder for the league to obtain those rights.
MLB has been working with cable and satellite providers to ensure that if it does take rights fees from Diamond, broadcasts will be as accessible and inexpensive as possible to viewers.
The league has met with at least DirecTV, Comcast, Charter and YouTube recently, preparing for change, according to Ourand.
Diamond’s grace period to pay for the Padres’ rights fees is set for the end of Wednesday.
MLB is expected to approach the bankruptcy court the next day, Opening Day, regarding their rights. Writes Ourand:
The idea for MLB is that the league will pick up more rights as teams’ rights deals with Diamond’s Bally Sports-brand RSNs expire — a process that could take several years due to the length of many of those contracts. Once MLB can go to the market with the rights from several teams, it believes it will be able to work out better distribution deals that could pay it more.
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With Opening Day this week, MLB still hasn’t closed a deal with any of its big distributors. But MLB’s pitch seems to be resonating with some of the bigger ones, sources say.