Diamond Sports is allegedly over $8 billion in debt, but that won’t save the company from paying out some of its MLB contracts in full. Diamond Sports will have to pay out the full value of its contracts with the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers, a judge ruled Thursday.
Diamond Sports, which owns Bally Sports, which has a series of networks that broadcast MLB games, filed for Chapter 11 bankruptcy in March. Last fall, the company claimed to be $8.67 billion in debt.
Following the filing, a judge initially ruled Diamond Sports would be responsible for paying back teams half of what they were owed. Thursday’s ruling, made by federal Judge Christopher Lopez, altered that decision, making Diamond Sports responsible for its full contracts with the Diamondbacks, Guardians, Rangers and Twins.
Diamond Sports owns the broadcast rights of 13 MLB teams. The company, along with Sinclair Broadcast Group, purchased those rights for nearly $10 billion in 2019.
The bankruptcy filing raised questions about whether Bally Sports would continue to broadcast games throughout the 2023 MLB season. MLB said it would take over broadcast rights if Diamond Sports stopped making payments.
That scenario occurred Wednesday, when MLB took over broadcast rights of San Diego Padres games. Diamond Sports reportedly missed a payment on its Padres contract Tuesday, causing MLB to step in. If MLB takes over for teams, the league vowed to pay those teams up to 80% of the original rights contract.
MLB praised Lopez’s ruling in a statement Thursday, per the Associated Press.
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.”
In his ruling, Lopez stressed the importance of making sure fans know when and where they will be able to watch their favorite team’s games during the 2023 MLB season.
“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.”
Lopez said he was not responsible for making that call, and urged Diamond Sports and MLB to continue to discuss the situation.
Source: Yahoo Sports