A federal bankruptcy judge has ordered Diamond Sports to pay the full value of its media contract to the Minnesota Twins. The Arizona Diamondbacks, Cleveland Guardians, and Texas Rangers were also involved in this ruling.
Judge Christopher Lopez made the ruling on Thursday in Houston. Diamond Sports, which owns 19 networks under the Bally Sports banner, has been in Chapter 11 bankruptcy proceedings in the Southern District of Texas since it filed in March. Diamond said in a financial filing last fall it had debt of $8.67 billion.
In April, the judge ruled Diamond to pay half of what the teams were owed in rights fees.
“I think the contract rate is the right answer here,” said Lopez in issuing his decision after two marathon days of testimony.
The Twins still don’t know the ultimate outcome, which ultimately depends on if Diamond Sports makes the decision to walk away from distributing Twins games. St. Peter says for the short term, he doesn’t expect anything to change.
“The games are still going to be on Bally,” Twins President Dave St. Peter told WCCO’s Chad Hartman Friday. “They obviously have some decisions to make as a company. There is not a timetable that was set by the judge relative to their next steps, in essence to their accepting or rejecting any particular contract. We go forward expecting Bally to be our partner through the rest of the season.”
Diamond Sports owes the Twins $54.8 million for the 2023 season.
On Tuesday, the last San Diego Padres game was aired on Bally Sports San Diego after Diamond Sports missed a rights payment fee and let the grace period expire. MLB took over production of Padres’ telecasts, beginning with Wednesday’s game at the Miami Marlins.
St. Peter says the Twins are ready for that to happen in Minnesota scenario should Diamond chose to walk away. With no contract in place for the Twins beyond 2023, there's little motivation for Diamond to pay the team what is owed.
“If that were to happen in Minnesota, the Major League Baseball and the Twins would be prepared to immediately stand up the production and distribution of Twins telecasts,” explains St. Peter. “And I would add probably in a way that would incrementally increase the accessibility of those telecasts, particularly through a direct-to-consumer offering.”
St. Peter says there could even be another local television angle to consider.
“We do like the concept that (MLB) Commissioner Manfred has championed around some form of local media entity,” St. Peter told WCCO Radio. “At Major League Baseball they’re building out that division, the concept of centralizing some of those local media revenues over the long haul.”
Major League Baseball said in a statement Thursday night: “MLB appreciates the ruling from the Federal Bankruptcy Court in Houston requiring Diamond to pay the full contractual rate to Clubs. As always, we hope Diamond will continue to broadcast games and meet its contractual obligations to Clubs. As with the Padres, MLB will stand ready to make games available to fans if Diamond fails to meet its obligations.”
The decision is another chapter in what has been a contentious week in the strained relationship between MLB and Diamond Sports.
Whether MLB takes over other teams and Diamond Sports lets other payments lapse after the grace period will have to be answered over the next four months. If Diamond rejects the terms of the agreement, the rights would revert back to MLB and the teams.
Lopez stressed during his closing remarks that he wants both sides to continue to talk, despite how contentious the process has been.
Lopez also said he realized he is not answering the biggest question fans have — will their team’s games end without interruption?
“I’m not really answering questions that real fans have, the folks who come home after work, the family dealing with increased costs that just wants to know they can come home and watch their team for the rest of the season, and where they’re going to watch their team play,” Lopez said. “Those issues aren’t being decided and it’s not my decision to make. I’m careful not to overstep my boundaries.”
Commissioner Rob Manfred testified on Wednesday that in the case of the Padres and other teams that would have their rights deals end that MLB will pay teams up to 80% of what they would have received. Manfred said MLB came to that percentage because it would prevent teams from encountering financial distress and allow them to make player payroll.
Manfred also said MLB made a $9.1 billion bid for the regional sports networks when they were up for sale four years ago. Diamond Sports Group and Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox’s film and television assets to be approved.
Diamond has the rights to 41 professional teams — 13 baseball, 16 NBA and 12 NHL.
The Associated Press contributed to this story.
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