A bankruptcy judge has approved the plan put forward by Diamond Sports Group for the company to return from bankruptcy. The Athletic’s Evan Drellich was among those to first report the news.
Today’s confirmation hearing was the last step in a long-drawn-out process for DSG to return to business as usual, or at least some semblance of such. The company remains the broadcast home of the Braves, Cardinals, Marlins, Angels, Tigers, and Rays for 2025 and beyond. However, it will no longer host the Twins, Guardians, Brewers, Rangers, and Reds. The Royals could also be looking elsewhere for a broadcast deal; their relationship with DSG is still up in the air. Further changes include a new name for DSG’s regional sports networks (RSNs), FanDuel Sports Networks, and a deal to make DSG’s RSNs available on the Amazon Prime streaming service (for an additional fee).
The Braves and Major League Baseball filed an objection to DSG’s proposal last Friday, but Drellich noted that they later withdrew the objection. The United States Trustee Program also issued an objection, but Judge Christopher Lopez approved the plan regardless.
Reports emerged about two years ago, in the early days of 2023, that the company was in financial trouble. Cord cutting had delivered a big blow to the RSN model, impacting DSG and several other companies. DSG officially filed for bankruptcy in March of 2023 and it seemed at times as though they might not survive as their deals with teams fell apart one-by-one.
They have continued to hang on, though with a diminished portfolio. DSG used to have deals with the Padres and Diamondbacks, though both were dropped by DSG last year as part of the bankruptcy process. MLB took over the broadcasting, leaving things relatively unchanged for TV viewers while also opening up a direct-to-consumer streaming option. The Twins, Guardians and Brewers will be going down that path in 2025 as well. The Rangers and Reds are also cutting ties with DSG, though the future broadcast situation with those two clubs is less clear.
DSG will see if a pivot to streaming can help them. Many of their previous deals were only for in-market television broadcasting but Drellich relays today (X link) that the Braves have granted DSG streaming rights, meaning that the company now has those rights for each of the clubs that it still has deals with.
Whether that can that business model is sustainable in the long run for DSG remains to be seen. MLB expressed concern that the club would fall back into bankruptcy in the near future, so time will tell if that line of thinking is correct or not.
Whether it’s through DSG or MLB, these teams are generally expected to be receiving less revenue for the short term. It’s possible that streaming will eventually grow and make up some of the difference, but it’s impossible to know what those revenue streams will look like down the line. Some clubs, such as the Padres and Twins, have already lowered their payrolls in the wake of this paradigm shift. The Cardinals and Rangers plan to follow suit in 2025. That seemingly contributed to the weak offseason a year ago, so it’s an important facet of the baseball landscape and something to monitor going forward, for teams and players alike.
For fans of the clubs still with DSG, they can maintain the status quo if they like, as watching the games through a cable package will still be an option. But fans of many of these teams who are cord cutters will also now have the option of streaming the games without blackout restrictions, such as through the FanDuel app or an add-on to Amazon Prime.
Commissioner Rob Manfred has expressed a desire to market a multi-team streaming bundle one day, something akin to MLB.TV but without local blackouts. If DSG had not been able to emerge from bankruptcy, then MLB would have had a base of almost half the league to include in that bundle. That didn’t end up coming to pass but perhaps the league could work out a deal with the company involving the few remaining clubs still connected to DSG.
Like a phoenix rising from the ashes, Diamond Sports emerges from bankruptcy!
Who doesn’t look a good riches to rags to riches story??
Beat me to it.
It remains to be seen if they actually get as far as “riches.” For now, they survive.
Emerges???? Like a wild sea beast?? Who is running this incompetent sports group
A diamond shaped sea beast!
Typical financial news buzzword, like how in sports teams “turn a new leaf” “look to contend in 20xx and beyond” or are “retooling.”
Until the next bankruptcy…..
Chasing that market that isn’t there…
And will go right back in. Year tops. The business model just doesn’t work anymore. Most of these teams’ viewership for a regular season game is not much above the level of a popular local cable access show.
That’s why they’re expanding their model to include streaming.
“Waynes World Waynes World Party Time Excellent”
Only in Murica!
Can all the teams that lost their deals sue now? If Diamond isn’t bankrupt then technically didn’t they fraudulently weasel out of their contracts with those teams?
If they are ’emerging from bankruptcy’ as the article mentions, then I assume they were indeed bankrupt.
No.
The very nature of U.S. bankruptcy reorganization includes being able to reject prior contracts, with the approval of a bankruptcy court judge.
The goal of Chapter 11 bankruptcy is specifically to *reorganize*, recognizing that a business as previously structured can’t fulfill all of its obligations to creditors and other contractual claimants. But that there is, after reorganizing, a future going concern business that’s worth more alive than dead. (Chapter 7 bankruptcy, in contrast, is full liquidation of a business’ assets, paying the proceeds to creditors, because the business *isn’t* worth more alive than dead.)
The teams also had to agree to not object to DSG’s plan that was presented to the judge. If they had, the judge would not have allowed DSG to drop those contracts.
What a great scam! Why didn’t Trump think of this.
@realist101 Best comment of the year.
I’m actually looking forward to this new version. They just announced the option to subscribe via an Amazon Prime add-on, no TV package required. That will save me money.
Yes the corporate conglomerate we get our dish soap and childs books from owning my teams broadcast rights. What could be better?
Reading the ruling now. According to the court Diamond demonstrated that they have enough revenue to pay the teams remaining under contract for 2025 and the interest due to creditors so Judge Lopez agreed to their plan. In November of 2025 they have $2 billion in debt coming due and it didn’t appear from what I read that they have any way to pay it. My thoughts are that they will be right back in bankruptcy court in early 2026. Dissolution instead of reorganization. Only people that made any money on this case were the attorneys.
Sportico is reporting that DSG cut its debt from $8.6 billion pre-bankruptcy to $200 million after reorg. What’s the disconnect?
sportico.com/business/media/2024/diamond-sports-em…
Sportico. That’s all you needed to say to know that your info was wrong
DSG did not cut much if any of its debt. It simply reorganized it, meaning put off when it was due. It now has just $200 million due in 2024, $2 billion is now due in 2025 instead of 2024, and the balance of $6 billion in outstanding debt due over the next few years.
MLB, the Braves, and the DOJ’s objections were all regarding that debt which none of them felt DSG would be able to pay. In return for dropping their objection, DSG agreed to place 2025 payments to MLB teams in escrow. MLB teams at least will be guaranteed to be paid in 2025 and none of them took more than a 20% cut in revenue.
According to the court’s ruling they also have more than $400 million in obligations to sports teams in 2024.
The problem as I see it is that you just read an article about the bankruptcy instead of reading the actual ruling which is available publicly.
You say that like its a bad thing.
Looks like Angels fans will be able to watch this train wreck of a team on the DSG gambling focused RSN for at least one more season. Then DSG will go bankrupt again and MLB will take all this over by the start of the new CBA in 2027.
Padres fans understand your pain all too well. Hopefully Moreno will sell soon or decides to open his wallet to get some playoff berths before he dies.
awesome maybe they should have to pay the teams that stayed with them a huge fee for the hassle. Especially the braves so we can sign a SS, LF, and some starting pitching
Another BK within 18 months. Book it.
This model is garbage. Direct to consumer. Cut out the middleman.
Absolutely, but the reason we’re even here is the ballooning rights fees. Would teams like the Yankees and Dodgers be on board with an MLB tv streaming service instead of these middlemen? Probably won’t get as much revenue that way, and maybe that’s a good thing, but how do you convince them?
In other news the White Sox (and Bulls and Blackhawks) are doing their own streaming, but it’s $30! a month. Some Twitter guy said he wouldn’t watch the Sox if they paid him $30 a month.
That’s what’s next for these middlemen to guarantee their survival and teams the largesse of rights fees, streaming, but at an exhorbitant price.