The slow-motion death of the rights holder of many regional sports TV contracts, Diamond Sports, is currently taking place. The Braves’ TV contract payments during Diamond's bankruptcy are to be renegotiated as John Ourand of Street and Smith’s Sports Business Journal reports. There is some interesting reporting here as the May 31st bankruptcy hearing approaches.
More than two months into bankruptcy, Diamond appears to be no closer to working out streaming deals with any of the nine teams that have not relinquished those rights. Sources suggest that stalemate has pushed Diamond closer to keeping the contracts that make money and walking away from the ones that don’t. Diamond told MLB that it will commit to pay the full rights fee over the lifetime of those nine team contracts in exchange for their direct-to-consumer rights, sources said. At the same time, Diamond has promised those teams that it will give those rights back in as orderly fashion as possible if they are unable to make a payment at some point in the future. To date, those nine MLB teams have remained steadfast in not allowing Diamond to control their streaming rights: Angels, Braves, Cardinals, D-backs, Guardians, Padres, Rangers, Reds and Twins.
Diamond’s legal team is offering the Braves and eight other teams a choice: hand over your direct-to-consumer games in exchange for fulfilling the entire amount due from the contract. In other words, the Braves can give up their direct-to-consumer streaming rights and get the full amount of the current TV deal (around $100MM annually) instead of likely taking a haircut on the payments courtesy of the bankruptcy court. Diamond would willingly relinquish all rights in the event that they miss a payment in the future.
Even by legal standards, this displays more chutzpah than a Bryce Elder 0-2 changeup to a right-hand batter. Imagine telling the Braves, “give us your streaming rights for full payment on your already negotiated deal and if we don’t pay we will totally give everything back.” The fact that Diamond cannot meet its obligations is exactly the reason that they are in this situation in the first place. Also bankruptcies can go multiple rounds after this as well, so they likely still wouldn’t get full payment. It is reportedly expected that Diamond will miss their May 30th payment to the San Diego Padres, one that is an expensive and unprofitable deal (one of many) for Diamond.
TV contracts are an important source of revenue for all professional sports teams. It is not good for the Braves’ contract to be tied up in bankruptcy proceedings, let alone add anything of value like streaming rights to them. So the Braves, of course, are reportedly keeping their direct-to-consumer rights and thus will remain off Bally Sports+ for now. Because they don’t have a meaningful reason to do so, Mr. Saul Goodman. In any case, the Braves should expect to accept less than full payment for the life of the bankruptcy(ies). That amount will be negotiated on May 31st, but I would expect the debits will continue until Diamond and the Braves finally part ways.