The Diamond Sports Group saga took another turn yesterday when the broadcasting company announced a restructuring agreement that will see debtors invest $450 million to keep the company afloat. As part of the deal, Amazon would receive streaming rights for the NBA, NHL and MLB teams, for which Diamond currently holds those rights.
Although an agreement exists between Diamond and Amazon, it is important to emphasize that the plan cannot become official without bankruptcy court approval. This will take some time as the court and Diamond's creditors sort out the details.
The Athletic's Evan Drellich and Mike Vorkunov report that Amazon would pay $115 million, with an additional $50 million investment possible. While this would entitle them to streaming rights for every NBA and NHL team that signs a deal with Diamond, this only applies to five MLB teams. Diamond owns streaming rights for the Royals, Tigers, Marlins, Brewers and Rays. These clubs would continue to be broadcast on cable on Diamond's Bally Sports networks, but streaming access in the market would move to Prime Video. MLB has opposed selling additional streaming rights to Diamond, but ESPN's Alden González reports that Amazon's involvement will not be conditioned on further streaming acquisitions.
Until this week, it seemed likely that Diamond would abandon the regional sports network entirely after the 2024 MLB season. The agreement with Amazon represents a significant change and leaves some MLB teams in a state of continued uncertainty.
Diamond has broadcast agreements with 11 MLB teams. The company's lawyer said yesterday that nine of those clubs – the Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals and Tigers – will be paid in full for the 2024 campaign (passed on by González). The company is trying to renegotiate its contracts with two others, the Guardians and Rangers, for lower fees. It's also in talks with the Twins, whose previous contract with Diamond expired at the end of last season – leaving her as a broadcast free agent, so to speak.
Diamond's attorney told the court yesterday that the company has offered terms to all organizations in Cleveland, Texas and Minnesota to continue broadcasting their games in 2024 (via The Athletic). He said the company expects answers from all three franchises by early February. A hearing scheduled for tomorrow morning has been postponed indefinitely to allow the sides to consider the scope of the streaming deal, according to Drellich and Vorkunov.
None of the Rangers, Guardians or Twins are obligated to accept reduced rights fees. However, if they decline, it is likely that Diamond will terminate contracts with Texas and Cleveland and leave Minnesota without a deal. Diamond already demonstrated its willingness to give up unprofitable terms during the 2023 season when it terminated agreements with the Padres and Diamondbacks.
This means Texas, Cleveland and Minnesota don't have much leverage. Diamond's lawyer said that one of the organizations (without elaborating) planned to negotiate a deal that would even extend beyond next season, according to The Athletic.
The uncertainty was reflected in the activity, or lack thereof, of such franchise activity in free agency. Minnesota announced at the start of the offseason that they were cutting payroll. They allowed it Sonny Gray And Kenta Maeda Saying goodbye and signing a free agent to a major league contract so far. That was a $950,000 replacement warranty Josh Staumontwho is rehabilitating from thoracic outlet surgery.
Texas is coming off a World Series, which typically spurs a team to be aggressive in the offseason. Instead, GM Chris Young indicated they wouldn't be as active as they have been in past winters. The Rangers have signed a few free agents – most notably a two-year, $22 million deal Tyler Mahle – but they didn't treat themselves to being at the top of their class. The sending situation is often cited as the reason for non-return Jordan Montgomerywhich remains on the free market.
Cleveland is never a big spender, so the lack of activity on its side is characteristic. Nevertheless, the club's flexibility appears to be limited. They took some salary Scott Barlow act and sign Austin Hedges to a $4 million free agent deal.
Whether all of these teams can sign a new contract with Diamond will become apparent in the next few weeks. Even if they remained with the networks for next season (and possibly beyond), that would result in some loss in their revenue. Paul Hoynes of Cleveland.com reported that the Guardians earned $55 million in local rights fees last season. For Minnesota, it was a similar amount, with Phil Miller of the Minneapolis Star-Tribune reportedly receiving $54 million in 2023. Evan Grant of the Dallas Morning News wrote yesterday that the Rangers' deal paid about $111 million per year.
Should one of those teams fail to reach an agreement, they would join a trio of clubs likely to operate without an RSN contract this year. MLB stepped in to handle in-market broadcasting for Arizona and San Diego last season. While MLB subsidized a portion of the D-Backs and Padres deals last season, commissioner Rob Manfred has made it clear they will not do so next season. Allowing MLB to handle the broadcasts would likely be less profitable for teams than if they signed a new contract with Diamond.
It appears MLB will also handle broadcasts for the Rockies, whose contract was terminated by AT&T SportsNet Rocky Mountain at the end of 2023. The Denver Post's Patrick Saunders reported this month that MLB is expected to stream Colorado games on the MLB.tv platform, as it does with the D-Backs and Padres. Saunders added that the Rockies made about $57 million from its broadcast contract a year ago.