MINNEAPOLIS — Major League Baseball is making some contingency plans in case the league will be forced to take over broadcasting duties for 17 of its teams this season, including the Minnesota Twins.
Those plans include the MLB hiring three executives to its new local media department this week, including two former employees from Bally Sports.
Bally Sports and its parent company, Diamond Sports Group, are currently dealing with financial troubles and could potentially lose the rights to broadcast games this season.
Diamond Sports Group is dealing with a heavy amount of debt and recently failed to make a $140 million interest payment on February 15th, which kickstarted a 30-day grace period.
The company is now working to find a solution to this problem, but there is a possibility that the company will have to file for bankruptcy when that 30-day grace period ends on March 15th.
Jason Gurwin is the co-founder of The Streamable, a news website that covers the television industry, live sports, and streaming channels.
He has been covering this situation for several months.
“With the baseball season starting in full in April, I think baseball wants to be prepared. Major League Baseball is going to need to put the games on TV one way or another,” Gurwin says.
Major League Baseball Commissioner Robert D. Manfred Jr.sent out this statement this week regarding Diamond Sports Group’s ongoing financial issues and how they could affect the league:
“Obviously, we want all of our broadcast partners to be successful. We don’t want them to have financial difficulties. We have been spending a lot of time and effort trying to work with Diamond to figure out exactly where they are. Obviously, our first choice would be that Diamond pay the Clubs what they’re contractually obligated to pay them…. We are prepared, no matter what happens with respect to Diamond, to make sure the games are available to fans in their local markets. We think it will be both linear in the traditional cable bundle and digitally on our own platforms.”
And it’s not just baseball that could be affected.
Bally Sports North owns the broadcast rights for the Twins, Timberwolves, Wild, and Lynx.
An NBA spokesperson says, “we are engaged in discussions with Diamond and are committed to ensuring that NBA fans in the markets served by Ball Sports have continued access to all local games.”
Gurwin says many sports networks are struggling right now due to the changing media landscape and cord-cutting.
“As a result of cord cutting the value of those regional sports networks have gone down as viewership has gone down and the revenue they make from them has decreased,” Gurwin explains.
“The numbers no longer make sense. Take the Twins for example. They are likely receiving $40 million a year for broadcast rights. The games are getting about 50,000 to 100,000 viewers per game. The companies aren’t able to sell enough ads to make those numbers work.”
Gurwin says it’s likely that Diamond Sports Group will file for bankruptcy later this month, but he says that doesn’t mean the company is going away.
"What that means is they will be able to use this time to reorganize the company where there can be an outcome that works for all involved,” Gurwin says.
“It would be in the best interest of the leagues and Diamond Sports Group to figure out a way to keep this going. Maybe the leagues will renegotiate those deals where these regional sports networks are non-exclusive so they can also offer local streaming of the games on MLB TV, or get out of local blackouts. There are a variety of options they could pursue.”
Gurwin says it's unclear how these financial troubles will affect the teams and their players, but with the current deal, he says the Twins for example are making $40 million dollars a year and not having that money could lead to some big changes.
"Major league baseball has a long season ahead of them where they can't kick the can down the road and wait for the fall to figure it out. So, I think that's why we're seeing so much more urgency around Major League Baseball right now.”
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