How Does Diamond Sports Skipping Payment Impact Rangers?
As expected, Diamond Sports Group LLC is skipping its $140 million interest payment on Wednesday, as the company will assess its options the next 30 days.
The skipping of the interest payment triggers a 30-day grace period.
Diamond Sports Group LLC is the operating company for the Bally’s sports brand, which owns and operates the 21 Bally’s Sports regional networks nationwide. Bally’s Sports Southwest, formerly Fox Sports Southwest, owns the local broadcast rights to the Texas Rangers, Dallas Mavericks and Dallas Stars.
Diamond owns the rights to 14 MLB teams.
The network has reportedly been heading toward bankruptcy, which Bloomberg reported as a “complex $8.6 billion debt restructuring in bankruptcy court.”
The Dallas Morning News reported that, for now, the viewing habits of Rangers, Stars and Mavericks fans are unlikely to be disrupted.
“We certainly expect that there will be no disruption in the televising of Texas Rangers games for the upcoming season,” Rangers spokesman John Blake said. “We are confident that a long-term solution will be accomplished for the RSN issue.”
The more immediate issue is that any bankruptcy would likely prevent Diamond from paying out to the Rangers and other teams who have media rights deals with them. Those payments help pay player salaries, among other things.
The Morning News reported that the Rangers are schedule to receive their first payment of 2023 in March, which will be $25 million. The Rangers are paid $100 million annually.
Diamond reportedly owes the franchise it has rights deals with $2 billion in 2023. Entering bankruptcy would protect them from making those payments until they’re reorganized.
Cord-cutters and rights fee issues with television providers are part of the reason Diamond is having financial issues. Right now, many Rangers fans are locked out of watching in-market home games because the only major provider that carries Bally’s is AT&T DirecTV.
Bally’s and other providers, including YouTube TV, Comcast and Charter, haven’t been able to agree to rights fees.
Bally now has a streaming service for local fans, but the cost is on the high end at $19.99 per month.
For that reason, MLB has reportedly not given Diamond or any other providers any more local streaming rights, with the belief that MLB might use the situation as leverage to get all of the local broadcast rights back.
You can find Matthew Postins on Twitter @PostinsPostcard
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