Sources — DSG pays Reds, will maintain team’s broadcast rights

Diamond Sports Group, the Bally Sports operator navigating through bankruptcy proceedings, made its scheduled payment to the Cincinnati Reds on Monday night, which means it will maintain control of the team’s broadcasting rights in the near future, sources told ESPN on Tuesday.

Diamond initially missed its scheduled payment to the Reds around the middle of April, triggering a contractual grace period that was set to expire this week. Had Diamond not made its payment before the end of that window, Major League Baseball would have likely taken over the team’s broadcasts as soon as this weekend. The Reds are one of 14 major league teams under the Diamond umbrella, but all of them still remain under the company’s control.

Four teams — the Minnesota Twins, Cleveland Guardians, Texas Rangers and Arizona Diamondbacks — have yet to be paid their rights fees this year and will be part of an evidentiary hearing on May 31 in front of a bankruptcy judge who will hear Diamond’s claim that they should be allowed to pay lesser rights fees to account for market changes that have contributed to the steady deterioration of the traditional cable model. MLB has filed motions in bankruptcy court in an effort to force Diamond to either pay their contractually obligated rights fees or let teams break free from their contracts.

MLB has said it is ready to broadcast the games of teams that fall out of Diamond’s ownership, aiming to do so through the traditional cable model and through its online streaming service, MLB.TV. But the league, which holds broader long-term goals of a more national approach to all 30 of its teams’ broadcasting rights, must wait for payments to be missed in order for teams to fall out of Diamond’s ownership.

Sinclair, with Diamond Sports Group as a subsidiary, purchased 21 regional channels from Fox in 2019 for $10.6 billion. But the company took on about $8 billion of debt in order to do so and was especially hurt as the rate of cord-cutting accelerated in the United States, ultimately filing for Chapter 11 bankruptcy in March. Diamond maintains the rights to 42 teams across MLB, the NHL and the NBA, but MLB is the most directly impacted because its regular season is ongoing and because rights fees make up a substantive portion of its teams’ economics.