Message #2284341

[welch]

The Athletic has a story. Summary:

Diamond Sports Group will not broadcast San Diego Padres games after Tuesday, with the media company expected to miss its rights fee payment by Tuesday night’s deadline. Here’s what you need to know:

- Diamond Sports said in a statement to The Athletic that it “decided not to provide additional funding to the San Diego RSN that would enable it to make the rights payment to the San Diego Padres during the grace period.” The company said it is continuing to broadcast games for teams under its contracts.

- Bally Sports San Diego — the San Diego RSN and broadcaster of Padres games — is not part of Diamond’s bankruptcy filing since it is a joint venture between the Padres and Diamond Sports. Therefore, Diamond cannot argue against it in bankruptcy court and there are no bankruptcy law protections that can overcome a missed payment.

- The missed payment by Diamond Sports means that media rights are expected to revert to the Padres, with MLB expected to produce the team’s game in Miami on Wednesday.

Perhaps it’s a coincidence that this news emerges on the eve of Wednesday’s mega-hearing in bankruptcy court where Diamond will argue it should pay four teams less than the contracted rate because of changing economic conditions. And maybe it’s not a coincidence as Diamond’s lawyers are sure to use the Padres as proof the RSN contracts are too rich.

The Padres broadcaster is a joint venture with the team and Diamond and is therefore not under the bankruptcy. As a result, Diamond could not just cut the Padres’ fee and rely on the automatic stay that applies to all contracts under a bankruptcy. One source, who has advised some of the creditors, believes Diamond is sending a message to MLB with the move, as if to taunt them with how much the Padres are losing. This source texted: “The question to ask is, ‘What is MLB doing?’ I mean they just cost the Padres a bunch of money without a clear way to replacement.