MLB takes over D-backs broadcasts after ruling

A bankruptcy judge approved Diamond Sports Group’s request to shed its contract with the Arizona Diamondbacks, prompting Major League Baseball to step in, beginning with the team’s game against the Atlanta Braves on Tuesday.

Like it did upon taking over the San Diego Padres‘ broadcasts at the end of May, MLB will make D-backs games available blackout-free through its streaming service, MLB.TV, and will provide a linear cable option on different channels through Cox, DirecTV, Spectrum and Comcast Xfinity. Other providers such as Mediacom, Orbitel, TDS and Optimum/Suddenlink will also carry D-backs games, as will the streaming service Fubo.

A spokesperson for Diamond Sports said its contract with the D-backs — a reported 20-year, $1.5 billion deal that began in 2015 — “had financial terms that were not aligned with its long-term plans.”

By lifting blackouts, MLB stated that the D-backs’ reach can increase from 930,000 to 5.6 million homes in the team’s home television territory. Local fans can pay $19.99 a month or $54.99 for the rest of the season to stream D-backs games; the next six games, through Sunday, will be provided for free through the team’s official website and the MLB app.

MLB will use the same broadcasters, Steve Berthiaume and Bob Brenly, and are expected to deploy most of the same behind-the-scenes workers to maintain the team’s broadcasts for the rest of this season.

“This decision provides us with an opportunity to partner with Major League Baseball to produce high-quality broadcasts of D-backs games on current platforms, expand access to include streaming options, and remove blackouts that have been a fan frustration point for years,” D-backs CEO Derrick Hall wrote in a statement. “We have enjoyed our partnership with Bally Sports Arizona and thank them for the longtime partnership. But we look forward to providing unprecedented access to our exciting team moving forward, including a greatly expanded reach of new households.”

Diamond Sports Group, the Sinclair subsidiary that operates under the name Bally Sports, filed for Chapter 11 bankruptcy on March 14 and has since shed two of its 14 major league teams. The company wrote in a statement that it anticipates “making all rights payments for the remainder of the MLB teams in our portfolio through the end of this season.”

Diamond Sports initially took on more than $8 billion in debt when it purchased the regional sports networks for 42 teams across MLB, the NBA and the NHL in 2019 and struggled to maintain a sustainable business as the rate of cord-cutting increased throughout the country.

Diamond Sports has continuously stated that it needs additional streaming rights — it has the streaming rights to only five of its MLB properties — in order to prop up its Bally Sports+ app and generate more revenue. MLB, however, has been adamant against providing more rights to a company that thrust itself into this position in the first place. The league has stated its hopes that teams are paid what they’re owed in rights fees but also envisions a future — perhaps as soon as the next two to three years — when most, if not all, broadcasting rights are operated under a national umbrella.

The D-backs and Diamond Sports were initially scheduled for a hearing on June 29, but it was pushed back 2½ weeks “due to ongoing and positive discussions toward finding a solution,” Hall and Diamond Sports CEO David Preschlack wrote in a statement.

In Tuesday’s court hearing, however, Diamond Sports attorney Andrew Goldman said the two sides were not able to reach agreement on a deal that would garner support from the commissioner’s office.

MLB has promised Bally Sports teams that it would backstop broadcast payments up to 80% in 2023, but sources said that won’t be the case in 2024, setting up the possibility of several owners losing significant broadcast revenue at that point. Long term, though, MLB believes controlling teams’ broadcasting rights will be the best way to maximize revenue in an increasingly digital era.

That plan will continue with the D-backs.

“As Major League Baseball has proven with the Padres, we’re ready to produce and distribute games to fans, including Diamondbacks games starting today,” MLB chief revenue officer Noah Garden wrote in a statement. “While we’re disappointed that Diamond Sports Group failed to live up to their contractual agreement with another club, we are taking this opportunity to reimagine the distribution model, remove blackouts on local games, improve the telecast and expand the reach of Diamondbacks games by 4.7 million homes.”