Warner Brothers Discovery to Move From RSNs
More uncertainty entered the broadcast world when Sports Business Journal reported Friday that Warner Brothers Discovery informed its clients that intends to pull out of the Regional Sports Networks business in a matter of weeks.
This comes just a couple of weeks after Diamond Sports Group, which owns the Bally’s Sports Networks, skipped its $140 million interest payment, triggering a 30-day grace period as the company plots its next move.
This is not the first time WBD has attempted to leave the RSN game, reported SBJ. But this time it appears the move is serious.
WBD’s RSN networks are branded AT&T SportsNet, which are positioned in the Denver, Houston and Pittsburgh markets, and has a stake in Root Sports in Seattle. WBD’s decision impacts 10 MLB, NBA and NHL teams, with the Astros, Mariners, Pirates and Rockies impacted.
WBD has reportedly given those teams until March 31 to reach agreement to buy their broadcast rights back. Afterward, WBD will look to liquidate the assets through Chapter 7 bankruptcy.
In the same story, SBJ reported that Diamond Sports Group may file for bankruptcy as early as mid-March.
That decision has importance to 14 MLB teams, including the Texas Rangers. Diamond Sports Group 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 Rangers, Dallas Mavericks and Dallas Stars.
After Diamond Sports Group skipped the interest payment, MLB commissioner Rob Manfred assured baseball fans that if Diamond Sports Group falls into bankruptcy that games for those teams affected will be broadcast.
Manfred said MLB is working on a contingency plan if Diamond Sports Group falls into bankruptcy and it impacts the company’s ability to broadcast games.
If Diamond Sports Group moves into bankruptcy it would be an attempt to restructure mounting debt as a result of cord-cutters and rights fee issues. If it went into bankruptcy, DSG would not necessarily have to make its revenue-sharing payments to teams based on broadcast contracts. The group is expected to pay out $2 billion in rights fees this year.
The Rangers are set to receive $100 million for 2023 in quarterly payments starting next month. If DSG is unable to make rights fee payments, it could impact how the Rangers are able to pay player salaries.
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