HOUSTON — A federal bankruptcy judge has ordered Diamond Sports to pay the full value of its media contracts to the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers.
Judge Christopher Lopez made the ruling on Thursday in Houston. Diamond Sports, which owns 19 networks under the Bally Sports banner, has been in Chapter 11 bankruptcy proceedings in the Southern District of Texas since it filed in March. Diamond said in a financial filing last fall it had debt of $8.67 billion.
In April, the judge ruled Diamond to pay half of what the teams were owed in rights fees.
"I think the contract rate is the right answer here," said Lopez in using his decision after two marathon days of testimony.
The decision is another chapter in what has been a contentious week in the strained relationship between MLB and Diamond Sports.
On Tuesday, the last San Diego Padres game was aired on Bally Sports San Diego after Diamond Sports missed a rights payment fee and let the grace period expire. MLB took over production of Padres' telecasts, beginning with Wednesday's game at the Miami Marlins.
Whether MLB takes over other teams and Diamond Sports lets other payments lapse after the grace period will have to be answered over the next four months. If Diamond rejects the terms of the agreement, the rights would revert back to MLB and the teams.
Lopez stressed during his closing remarks that he wants both sides to continue to talk, despite how contentious the process has been.
Lopez also said he realized he is not answering the biggest question fans have — will their team's games end without interruption?
"I'm not really answering questions that real fans have, the folks who come home after work, the family dealing with increased costs that just wants to know they can come home and watch their team for the rest of the season, and where they're going to watch their team play," Lopez said. "Those issues aren't being decided and it's not my decision to make. I'm careful not to overstep my boundaries."
In Cleveland, Guardians owner Paul Dolan has pledged all of the team's 2023 games will be televised one way or another, but did not rule out a situation similar to what San Diego is now facing.
"Bally's has said they're going to live up to their commitments and show the games," Dolan told 3News' Jim Donovan back in April. "Major League Baseball, who we are in constant contact with, has said that if for whatever reason they don't, they'll step in. So we fully expect all of our games to be viewable by our fans."
Around the start of the season, the Guardians had yet to receive a $55 million rights payment from Diamond. Still, Bally Sports Great Lakes has continued to air the team's games.
Commissioner Rob Manfred testified on Wednesday that in the case of the Padres and other teams that would have their rights deals end that MLB will pay teams up to 80% of what they would have received. Manfred said MLB came to that percentage because it would prevent teams from encountering financial distress and allow them to make player payroll.
Manfred also said MLB made a $9.1 billion bid for the regional sports networks when they were up for sale four years ago. Diamond Sports Group and Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox's film and television assets to be approved.
Diamond has the rights to 41 professional teams — 13 baseball, 16 NBA and 12 NHL.
