Sinclair/Diamond Sports bankruptcy watch

[comish4lif]

https://www.sportico.com/business/media/2023/phoenix-suns-local-media-deals-1234720912/

Suns going with free tv

Not so fast...

https://www.cnbc.com/2023/05/10/phoenix-suns-judge-halts-bid-to-exit-diamond-sports-network.html#:~:text=The%20Phoenix%20Suns'%20move%20to,network%20owned%20by%20Diamond%20Sports.

[HalfSmokes]

Bankruptcy court is where property rights go to die. There is a right of first refusal, but they can’t possibly match because part of the deal is number of households the games will be available ton

[nfotiu]

https://www.sportsbusinessjournal.com/SB-Blogs/SBJ-Unpacks/2023/05/30.aspx

Padres are the first team to lose their TV deal.   MLB will produce their games.   

[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.

[nfotiu]

Padres payroll including CBT is over 300 million.  Now they have no tv money and no prospects to get anywhere near the 80 or so million they were getting from Bally's.   Forbes had them losing 50 million last year, and have to be looking at losing over 100 million/year going forward.   How long is Seidler going to be willing to let that go on?   And to pile on, the team is 8 games out already.

[JCA-CrystalCity]

Padres payroll including CBT is over 300 million.  Now they have no tv money and no prospects to get anywhere near the 80 or so million they were getting from Bally's.   Forbes had them losing 50 million last year, and have to be looking at losing over 100 million/year going forward.   How long is Seidler going to be willing to let that go on?   And to pile on, the team is 8 games out already.

they almost have to trade soto at this point to restock and cut costs. I'm assuming they are in the max bracket, so it's probably a $30 million savings.

[imref]

So who can offer San Diego a package for Soto like the one they sent us? Obviously teams like the Yankees, Blue Jays, Mets, and Dodgers would be prime landing spots.

[HalfSmokes]

Padres payroll including CBT is over 300 million.  Now they have no tv money and no prospects to get anywhere near the 80 or so million they were getting from Bally's.   Forbes had them losing 50 million last year, and have to be looking at losing over 100 million/year going forward.   How long is Seidler going to be willing to let that go on?   And to pile on, the team is 8 games out already.

It's almost like bankruptcy law in the US has been twisted into a corrupt joke. Diamond was spun off to declare bankruptcy to get better deals on existing contracts. At no point was Sinclair actually in danger of bankruptcy

[nfotiu]

It's almost like bankruptcy law in the US has been twisted into a corrupt joke. Diamond was spun off to declare bankruptcy to get better deals on existing contracts. At no point was Sinclair actually in danger of bankruptcy

Yeah, it's some shady crap that they were able to maneuver that.

It would seem hard to believe that the bankruptcy court would agree to reduce fees without offering the teams to back out of the deal.   Even if they do agree to a break even price, then that price is going to drop significantly in a couple more years.   

[machpost]

So it looks like Padres games will be available in-market from MLB.TV for $19.99/month or $74.99 for the season (not sure if this is a prorated number or not). Surely that price will appeal to those who are paying for cable just to get the games.

[nfotiu]

So it looks like Padres games will be available in-market from MLB.TV for $19.99/month or $74.99 for the season (not sure if this is a prorated number or not). Surely that price will appeal to those who are paying for cable just to get the games.

I saw that too.  74.99 sounds pretty good for a full season.   20 a month is probably too high for everyone but avid followers, so likely won't produce a significant revenue stream.  I see they are on all the legacy carriers that had the RSN, so they are still likely trying to protect that revenue stream, which is unfortunate.   

$20/month would sound better if it got you all the games.   Instead you need some cable channels, Peacock, Apple TV, and maybe some others for the national games and playoffs.   Also if you have a few local sports teams you watch, like hockey and basketball, having to pay $20/month for each of those teams gets back to cable prices pretty quickly.

I was really hoping the MLB would use this opportunity to look for a new model that they can grow and that doesn't rely on carriage fees, but it doesn't look like that's going to be the case.

[HalfSmokes]

I wonder if the padres can bar Sinclair employees from their park now

[JCA-CrystalCity]

they almost have to trade soto at this point to restock and cut costs. I'm assuming they are in the max bracket, so it's probably a $30 million savings.

well, it's 2.5 out of the last wildcard with 3 teams ahead of them. not quite white flag time. but if they are 5 out of the last wc near the deadline & still 3 teams ahead of them, moving Soto might be prudent.

[imref]

https://www.wsj.com/articles/diamond-sports-san-diego-padres-bankruptcy-tv-payroll-b82c2b81