MLB files emergency motion that could lead to changes for how games are streamed

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MLB files emergency motion that could lead to changes for how games are streamed

Sat, 04/08/2023 - 15:13
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Major League Baseball is moving aggressively to gain control of broadcast rights for some teams.

Diamond Sports Group, a subsidiary of Sinclair Broadcast Group which owns Bally Sports Kansas City filed for Chapter 11 bankruptcy protection last month. That’s led to legal action by Major League Baseball.

Diamond missed rights fees payments to the Twins and Guardians, the Athletic reported, and MLB filed an emergency motion Wednesday that would make Diamond either pay the teams or terminate the contracts so the teams could take over the broadcasts.

On Thursday, the Arizona Diamondbacks also filed a motion asking the court to force Diamond to pay money the team is owed or terminate its contract, the Athletic said.

Should the court rule in MLB’s favor, it could have a trickle down effect to the Royals.

Royals CEO and chairman John Sherman said last week the team was prepared financially if Bally Sports failed to pay the team for its broadcast rights. It is not known if a payment to the Royals has been made or if a due date is approaching.

But MLB commissioner Rob Manfred said in February if one team’s contract with Bally Sports is terminated, then the league can terminate them all.

“Our first hope remains that Diamond figures out a way to pay the clubs and broadcast the games like they’re contractually committed to do,” Manfred said, per Cronkite News. “If Diamond doesn’t pay, under every single one of the broadcast agreements, that creates a termination and our clubs will proceed to terminate those contracts. We would make use of our asset, the MLB Network. We would go directly to the distributors and make an agreement to have those games on cable networks.”

A court would have to agree to Manfred’s assertion that all the contracts are connected. But If Diamond Sports Group loses the right to broadcast Royals games on Bally Sports Kansas City, Sherman thinks MLB will step in and do a great job covering games using the Royals’ current broadcasters.

“MLB has got a network and I think the commissioner has been clear that if anything happens with Bally’s, we’re gonna stand up that network, we’re gonna distribute the games via MLB Network and also direct to the consumer via streaming as well,” Sherman said. “But regardless of whether the management of that is local, or in central baseball, it’s going to be very localized from our broadcast crew and how we deliver games to our fans.”

Centralized coverage

Weeks before the bankruptcy-protection filing by Bally Sports’ parent company, Forbes reported Warner Brothers Discovery announced it was getting out of the regional sports network (RSN) business.

That affected deals with the Astros, Mariners, Rockies and Pirates.

Sherman said the RSN model has become outdated. Each MLB team makes its own deal for local broadcast rights, and 14 have contracts with Bally Sports.

“I think the long-term vision would be that there’d become a centralized global MLB media company, I would say maybe even NFLlike,” Sherman said. “It’s a difficult business model, but if you think about the fragmented nature of the RSN business and all the challenges, that was a great structure and great model while it worked.

“Long term, and I don’t think it’s a secret, I think the league would get to do it the right way. But we’d like to have rights back and be in control of the distribution of our content long term.”

ESPN’s Alden Gonzalez reported the league’s plan is to one day broadcast games on a regionalized MLB Network while also streaming on MLB.TV. That would include inmarket games “since there would no longer be a competitor in the local market blocking them from doing so.”

‘Blackouts have to go away’ If — and that’s still a big if — the league takes over broadcast rights for the Royals and other teams, allowing fans to buy a streaming option for games through MLB.TV regardless of where they live would be a significant upgrade.

Cord-cutters in Kansas City and the surrounding area have long complained that streaming options are either limited or too costly, so that would be a welcome change.

Meanwhile, fans outside of Kansas City have been frustrated to find Royals games blacked out, even though they live hundreds of miles from Kansas City.

Sherman has heard those complaints. “The blackouts have to go away,” Sherman said. “I think that would be a first order of business when and if this becomes MLB media.”