What the Bally Sports saga means for NBA, NHL, MLB broadcasts: All you need to know

If you have questions about the future of your team’s live games on your local cable, satellite or digital provider, particularly those on Bally Sports channels, we’re here to answer with what we know so far.

Diamond Sports Group, the Baltimore-based corporate parent of the 19 Bally Sports channels that air 47 NBA, MLB, NHL and WNBA teams, announced Feb. 15 that it would skip a $140 million debt payment due that day and use the month-long grace period as part of its effort to financially reorganize itself.

Many observers interpret the move as a precursor to a Chapter 11 bankruptcy reorganization, though that is not a certainty. Diamond has $8 billion-plus of debt, incurred as part of parent Sinclair’s 2019 purchase of the regional sports channels, and lost $1.2 billion in the most recent fiscal quarter.

“Certainly more likely that they will file bankruptcy because they did not make the payment,” said Schuyler Carroll, a bankruptcy attorney who is not connected to Diamond. “But not necessarily that they will file bankruptcy. They are still continuing discussions with their creditors to try and avoid bankruptcy. But those can often be difficult.”

Diamond in a Feb. 15 statement said it “intends to use the 30-day grace period to continue progressing its ongoing discussions with creditors and other key stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future.”

But what does that mean for fans of those 42 teams and the other content aired on those stations?

Here’s an FAQ on what we know about the Diamond Sports situation and about how watching your teams — and paying to watch them — may be affected. This story will be updated as news develops.

What is a regional sports network?

These are the local cable, satellite or broadband channels that air live NBA, NHL, MLB and other sports within a defined regional territory. The RSNs typically produce and air the games, and pay the teams an annual fee — usually in the tens or millions of dollars or more — for the rights. The RSNs then negotiate distribution agreements with cable, satellite and digital distributors, which then market to the general consumer.

Team RSN deals are separate from the national rights fees paid by the major networks or tech giants, such as NBC or ESPN or Amazon, to broadcast and stream games nationally. Those deals are often in the billions of dollars.

What does bankruptcy mean in this case?

No one precisely knows, but we recently wrote a detailed look at that very question. In summary, if Diamond files for Chapter 11, that does not automatically mean the payments to the teams stop. Were that to occur, the teams might then be able to get out of those deals and strike new ones. But it’s not a given that Diamond will cease payments. The company’s only business is RSNs, so letting the teams flee would contradict any effort to emerge from bankruptcy.

One scenario is Diamond’s lender could convert their loans to equity, take over the company and continue making the rights payments. Another is Diamond continues to make payments to some teams, but not others. Think of a retailer in bankruptcy walking away from some store leases deemed uneconomic, but keeping others.

“Diamond Sports Group expects that its business will continue as usual, and it will keep broadcasting quality live sports productions for fans while it addresses its balance sheet,” the company said Feb. 15.

Will I still be able to watch my teams?

If a bankruptcy occurs and Diamond stops rights fee payments, the three men’s leagues — MLB, NHL and NBA — are putting in place contingency plans to make sure fans can watch. And in the case of MLB, that league almost seems to be hoping for this. Just how you watch, who broadcasts or streams them, and how much you pay after a bankruptcy reorganization is all still unknown.

The NHL and NBA are toward the end of their regular seasons and most rights fees for the 2022-23 year have been paid. But MLB has the whole season coming up. Commissioner Rob Manfred this week has been outspoken that MLB has a plan and is ready to step in and produce the games. And he sees a silver lining: Currently, most of the RSN deals with distributors ban streaming of the games (if you are a cable company, digital streaming can take away viewers). By ripping up all those deals in a bankruptcy, MLB can then package digital with linear TV.

“I hope we get to the point where on the digital side, when you go to MLB.TV, you can buy whatever the heck you want,” Manfred said Feb. 16. “You can buy the out-of-market package. You can buy the local games, you can buy two sets of local games — whatever you want. I mean, that is, to me, the definition of what is going to be a valuable digital offering going forward.”

Rob Manfred addresses reporters on Feb. 16 in Dunedin, Fla., at the Grapefruit League Media Day. (Jonathan Dyer / USA Today)

Also, MLB could do away with the dreaded blackout, the policy that barred games from airing in areas RSNs deemed outside their coverage area.

The NHL released a statement Feb. 16 saying it is “closely monitoring the RSN situation.”

“We will be prepared to address whatever circumstances dictate to provide our fans with access to our games,” the statement said.



If Bally RSNs go bankrupt, MLB has ‘opportunity to fix this blackout problem,’ says Rob Manfred

What pro teams are on Bally Sports channels?

The MLB teams with Diamond Sports RSN deals: Atlanta Braves, Arizona Diamondbacks, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, San Diego Padres, St. Louis Cardinals, Tampa Bay Rays and Texas Rangers.

The NBA teams: Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Dallas Mavericks, Detroit Pistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, New Orleans Pelicans, Oklahoma City Thunder, Orlando Magic, Phoenix Suns and San Antonio Spurs.

The NHL teams: Anaheim Ducks, Arizona Coyotes, Carolina Hurricanes, Columbus Blue Jackets, Dallas Stars, Detroit Red Wings, Florida Panthers, Los Angeles Kings, Minnesota Wild, Nashville Predators, St. Louis Blues and Tampa Bay Lightning.

In the WNBA, the Atlanta Dream, Dallas Wings, Indiana Fever, Minnesota Lynx and Phoenix Mercury are all carried on Bally networks.

Are other teams affected?

Yes. High school and college sports are also aired on many of the channels, as are some professional minor-league sports like hockey, along with programming such as poker and outdoors shows.

What if my team isn’t on a Diamond-owned channel?

While the RSN ecosystem is deeply strained by cord-cutting, the other RSN companies with MLB, NBA and NHL team deals are not in the same immediate insolvency danger as Diamond, which was created in a debt-laden deal when the channels were acquired in 2019.

Other areas have RSN deals with NBC Sports, like the Bay Area, Chicago, Boston and Philadelphia teams, or AT&T SportsNet, such as the Pittsburgh, Seattle and Houston markets along with the Utah Jazz, Colorado Rockies, Vegas Golden Knights and Portland Trail Blazers. The Los Angeles Lakers own half of Spectrum SportsNet, and Altitude Sports and Entertainment, owned by Stan Kroenke, airs the Denver Nuggets and Colorado Avalanche. Wizards and Capitals owner Monumental Sports & Entertainment last year bought full ownership of NBC Sports Washington from Comcast. Knicks owner James Dolan also owns the MSG Network, which airs his team’s games and the Brooklyn Nets and New York Islanders. SNY in New York, in a joint venture with NBC Sports, has the Mets. The Yankees air their games through the YES Network. Sinclair owns a minority share of YES, but it is not a Bally RSN.

Will my monthly cable bill change?

Unlikely, because if Diamond cedes the RSNs, whatever entity picks up the games — whether the leagues or another group that buys the licenses in bankruptcy — will want to continue selling them to the cable, satellite and digital distributors.

Will I need to subscribe to a new service in addition to what I pay for now?

Not likely. You may just have to learn a new channel number and name.

How is the bankruptcy likely to end?

First, you have to assume there is a bankruptcy. And then you need a crystal ball. The guess here is Diamond fights tooth-and-nail to keep the teams’ rights, because in reality, there is no company without them. Maybe it deems some of the team deals uneconomic and seeks to shed those.

How did we get here?

The main reason is that tens of millions of U.S. households have dropped their cable or satellite service — perhaps as many as 40 million such homes in recent years. Because of the loss of that subscription money, and the carriage fees associated with distribution, Sinclair and other RSN owners are under financial strain. And with Diamond specifically, it’s the $8 billion debt load stemming from acquisition putting additional pressure on its bottom line.

Diamond reported in November that it had lost another 10 percent of its subscriber base and revised its cash flow expectation downward by half.

Sinclair Broadcast Corp., which is the country’s biggest local TV station conglomerate, formed Diamond after paying $10.6 billion in August 2019 in a highly leveraged deal for where were then the Fox Sports RSNs. Reorganization and rebranding to Bally Sports followed for the channels, and Diamond and Sinclair have taken steps to separate themselves.

It soon became evident that Sinclair overpaid. Diamond was forced to write-down the value of the RSN deal by $4.2 billion and continues to face debt pressure over the deal. It failed to restructure its $8 billion-plus in debt in summer 2021, and the RSNs have been dropped or have to resolve carriage disputes from a number of services such as Dish, Sling TV, YouTube TV, Hulu and fuboTV, since 2019.

How much are the Bally Sports channels paying for the right to air games?

In the first nine months of last year, Diamond made sports rights fee payments of $1.47 billion, according to the company’s most recent quarterly report. Including the last quarter of 2022, Diamond has on its books future obligations to pay rights fees of $12.7 billion, according to the quarterly filing.


Bally Sports sideline reporter Ashley ShahAhmadi interviews Charlotte Hornets guard Terry Rozier after a game in December. (Kirby Lee / USA Today)

What about Diamond’s streaming app — wasn’t that supposed to help save it?

That was the goal, but the $20-a-month service apparently isn’t the lifeline Diamond had initially suggested it might be. If it were, the company wouldn’t be skipping debt payments and inching closer to bankruptcy. No major streaming service is yet profitable for the major broadcasters and tech giants (Netflix aside). Diamond hasn’t disclosed how many streaming subscribers it has. Also, at present, it only has streaming rights to five MLB teams.

How much are the teams affected?

The NBA has signaled that RSNs contribute around 15 percent of the league’s overall annual $10 billion-plus revenue pie. In baseball, where even more live game inventory is delivered to fans via RSNs, the local media rights are about 20 percent of total revenue. For the NHL, which like the NBA has 82-game regular seasons for teams, it’s less clear how much RSN money accounts for the annual revenue mix. But whatever the number, it’s vital for NHL teams.

The size of the rights fee deals varies by team, and some teams have equity stakes in their local RSN. The money is critically important for teams to operate, which is why their major-league parents are prepared to step in.

Can MLB afford to take over the RSN business?

“You know, we have a pretty good balance sheet in central baseball,” Manfred said Feb. 16. “I think it’s safe to assume that we will provide every support that we possibly can to those clubs that are at risk.”

MLB might look to borrow or pull in private equity investors if it indeed is forced to assume the RSNs for the 14 MLB teams. There is recent precedent: In 2020, the COVID-19 pandemic shortened the MLB season to a 60-game schedule almost entirely without fans, and teams borrowed up to $100 million or more to cover operating expenses and make up for missed game revenue, including rights not paid because games were not played.



What could a Bally Sports bankruptcy mean for RSNs’ team deals?

(Photo: Jakub Porzycki / NurPhoto via AP)

https://theathletic.com/4219468/2023/02/17/bally-sports-rsn-nba-nhl-mlb-broadcasts/ What the Bally Sports saga means for NBA, NHL, MLB broadcasts: All you need to know

Russell Falcon

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