In advance of a Monday US bankruptcy court hearing that will determine the future of the Arizona Diamondbacks’ local TV deal, Major League Baseball has made it known that it is prepared to assume control of the club’s telecasts should Diamond Sports Group decide to void its contract .
In a statement filed with Judge Christopher Lopez’s Houston court late Thursday, MLB stated that its “paramount interest is the continued broadcast of all games to its fans.” The league went on to say that it “stands ready to broadcast the Diamondbacks’ games” in the event DSG walks out of its deal on Monday, an ad hoc solution that thus far has borne fruit in San Diego. Meanwhile, Diamond has reportedly informed the Cincinnati Reds that it will pay the balance of the rights fees owed to the team by Saturday’s deadline.
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Season-to-date, the Reds have enjoyed a 40% ratings bounce on Bally Sports Ohio, in which the club owns an equity stake. Diamond recently extended its deal with Cincinnati through 2032.
Since MLB Media stepped in to replace Bally Sports San Diego as the in-market TV home of the Padres in early June, the club’s unique deliveries have improved 14% versus the year-ago period on the RSN, good for a net gain of 71,000 viewers.
While the Padres’ retention has been admirable, especially in light of the sudden channel switcheroo, the bonus impressions are somewhat underwhelming in light of the substantial gains in reach that MLB has achieved under the new local-TV scheme. With Spectrum, DirecTV, Cox and AT&T U-verse onboard, the Padres’ distribution has nearly tripled from 1.13 million homes under the voided RSN deal to approximately 3.26 million.
At the midway point in the season, the existential threat posed by DSG’s bankruptcy filing has largely been exaggerated, as the Padres remain the only club thus far to have been bounced out of its original local TV deal. More to the point, the financial burden to MLB and the DSG-affiliated clubs has been minimal; as commissioner Rob Manfred told a gathering of baseball writers earlier this week, the league thus far has collected 94% of the contracted rights fees for 2023.
The RSNs account for 82% of all MLB TV impressions.
As much as MLB would like to ensure the uninterrupted distribution of the D-backs’ games in the Phoenix market, Diamond Sports and the NL West franchise have been negotiating a revised rights deal since late last month, after DSG asked to postpone a June 30 hearing which would have granted it the right to formally dissolve the legacy TV contract. In a Tuesday court filing, DSG indicated that the two sides have been “engaged in constructive discussions on potential consensual paths forward to resolve the motion,” before adding that Diamond is prepared to proceed with the divorce if a “consensual solution” cannot be reached .
Through the All-Star break, the Diamondbacks’ ratings on Bally Sports Arizona are up 30% versus the analogous period in 2020.
MLB’s filing is largely motivated by the league’s desire to ensure that any local distributors it enlists in a potential D-backs TV bailout aren’t on the hook to continue making payments to DSG in the event the company elects to back out of its standing deal with Arizona. To that end, DirecTV also petitioned the court on Thursday, asking that it be relieved of the burden of having to continue making monthly carriage payments to Bally Sports Arizona if a side deal with MLB Media is reached.
A hearing to determine the fate of the Diamond-D-backs tie-up is scheduled for Monday at 3 pm EDT.
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