The NBA, NHL and MLB leagues are facing a massive cut.
In all likelihood, Diamond Sports Group will file for bankruptcy at the end of March, which will be followed by the liquidation of the holding company’s assets.
That could be a major problem for the 42 basketball, baseball and ice hockey teams that have sold their broadcasting rights to the 19 Regional Sports Networks (RSN), collectively owned by the Diamond Sports Group and known as Bally Sports .
Selling the broadcasting rights to these RSNs is one of the top three sources of income for most of the 42 teams.
Money from regional TV contracts is an important source of income
The payments made by the RSNs account for between ten and 70 percent of the income for the clubs concerned.
Bally Sports was in crisis after the number of subscriptions to RSN packages in the USA collapsed during the corona pandemic.
In mid-February, Diamond Sports Group defaulted on a $140 million loan installment.
After a grace period, the holding company’s assets will be sold to pay off as much of the existing debt as possible.
Problems for teams threaten
The contractual obligations towards the sports leagues are at the bottom of the list.
Many of the franchises in the NBA, NHL and MLB have been warned by Bally Sports that broadcast rights rates will be slashed by more than two-thirds over the next few years.
Since the teams still have fixed costs (especially player salaries), the clubs could experience financial bottlenecks.
In addition to reduced payments, the teams concerned are also threatened with the lack of TV broadcasts of their games on US television.
TV apocalypse for MLB?
This would be manageable for the teams in the NBA and the NHL, since the regular season of both leagues only lasts a few weeks and the broadcasting rights for the playoffs are held by national broadcasters.
On the other hand, the MLB threatens a catastrophe. The baseball league season doesn’t start until the end of March.
If no solution is found, there is a chance that a large number of games will not be broadcast.
However, Rob Manfred, the commissioner of the MLB, has ruled out such a scenario.
MLB: Various solutions possible
The most likely option is likely to be a new League Pass model.
Depending on the region, different games are blocked on the streaming service in the USA.
MLB has also brought the option into the room to produce the games itself and show them in direct cooperation with television providers.
The NBA and NHL should look to the results of the baseball league’s strategy as they plan their own course of action.
