Diamond Sports Group Expected To Retain

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Diamond Sports Group has been renegotiating its in-market deals with the Guardians, Rangers and Twins as part of its ongoing bankruptcy proceeding. Evan Drellich of the Athletic reported this morning that MLB expects all three organizations to sign one-year deals to remain on Diamond’s Bally Sports networks for the 2024 season. None of those contracts have yet been finalized.

The Twins’ TV deal expired at the end of the 2023 season. The Rangers and Guardians still had contracts with Diamond, but the broadcasting conglomerate had called those deals unprofitable and threatened to abandon them if they weren’t renegotiated at a lesser fee. Diamond already dropped contracts with the Padres and Diamondbacks during the ’23 season.

That left Cleveland, Texas and Minnesota to discuss reduced terms or to risk losing their local broadcasting fees entirely. According to various reports, Cleveland made $55MM off their TV deal a year ago. Texas took in around $111MM from Diamond, while Minnesota’s contract paid $54MM in its final season.

The specific terms under discussion aren’t known. However, Drellich reports that the Guardians and Rangers are expected to lose 15% or less of what they otherwise would have received in 2024. It’s unclear how much of a reduction Minnesota might need to take on their next contract. On the one hand, that’s still an unenviable position for those organizations. A 15% reduction could knock roughly $8.25MM off the Guardians’ expected revenues, while the Rangers’ deal could be reduced by something in the $17MM range by that criteria. (The precise figures are unclear, since the teams’ anticipated rights fees in 2024 were not necessarily the same as what they’d made in ’23).

At the same time, recouping 85+% of their expected fees is still a better outcome for those teams than moving on from Diamond entirely, which likely would have required the teams to turn to MLB to handle in-market broadcasting. That’s particularly true for Texas, which had one of the game’s more profitable RSN agreements. A one-year deal will still leaves the teams with long-term uncertainty, but they appear on track to remain on the Bally Sports networks for at least one more year.

If/when the new deals are finalized, Diamond will again be responsible for in-market televising for 12 teams. The company has already stated it’ll honor next season’s commitments at full price for the Angels, Braves, Brewers, Cardinals, Marlins, Rays, Reds, Royals and Tigers. Whether Diamond will be able to operate beyond the ’24 MLB season remains to be seen. Its recent restructuring agreement to sell its in-market streaming rights to Amazon for an influx of $450MM is designed to keep the company afloat beyond this year. That is still pending approval from the bankruptcy court. Drellich notes that some within the baseball industry remain skeptical about Diamond’s long-term viability even if the court signs off on its streaming deal with Amazon.

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