Major League Baseball on Tuesday threatened to pursue a “more drastic” legal remedy than it had previously considered if Diamond Sports Group, the bankrupt broadcasting company, cannot soon provide certainty about the 2025 baseball season.
Diamond operates 18 Bally Sports-branded regional sports networks. For fans of the nine MLB teams Diamond has under contract for 2025 — and the other three teams whose contracts with Diamond expire after this season — the concern isn’t only over what channel their team’s games will be carried on next year. How much some baseball owners spend this offseason in free agency might hang in the balance.
“Major League Baseball and those clubs are unable to plan to obtain revenue and to have certainty with respect to the 2025 season,” James Bromley, a lawyer for MLB, said in court Tuesday.
Judge Chris Lopez on Tuesday approved deals Diamond recently reached with both the NBA and NHL, calling them “a step in the right direction.” But contained in those agreements is a key date that has put MLB on the offensive: both require Diamond to come out of bankruptcy by April 1, shortly after baseball’s season begins.
Speaking for nearly 14 minutes straight, Bromley warned Diamond that it cannot wait that long to figure out its plans in a bankruptcy process that’s already taken nearly 18 months, and called the status quo a “Band-Aid.”
“We can’t go on and face our 2025 season in the first and second quarter of next year. The time to face the 2025 season is today,” Bromley said. “We need the court’s attention on this issue, and we need the debtor (Diamond) to be committed to doing this with speed in the short timeframe that I just described. And frankly, if it doesn’t happen, we obviously reserve our rights to come back for relief, including more drastic relief than we’ve looked at in the past.”
A lawyer for Diamond, Andrew Goldman, said that MLB actually has better protections in place than the NBA and NHL.
“What the NHL and NBA have agreed to, which they acknowledge, is not as good as what we gave baseball,” Goldman said.
Lopez said he was taking MLB’s concerns “very seriously,” and would schedule a hearing for an update in early October. MLB has yet to formally object during the bankruptcy process, but has threatened to do so before. Bromley did not elaborate on the “more drastic” legal remedy it could pursue, but said that if MLB must scramble to find new arrangements for 2025 carriage, MLB believes Diamond would be responsible for the associated costs.
Diamond now intends to hold its confirmation hearing for a get-out-of-bankruptcy plan in early- to mid-November. A late July hearing date was previously scrapped so Diamond could revise its business plan, one that MLB continues to look at skeptically.
Bromley on Tuesday said the company’s position was “not rosy,” pointing to Amazon’s decision to back out of a planned $115 million investment, and a $215 million payment that Diamond plans to soon make to its creditors, lessening the company’s available funds.
Goldman countered that the timeline Diamond offered in court on Tuesday, including key events in November, was legitimate.
“The dates laid out … are real dates. They are not aspirational,” Goldman said. “We are not looking to elongate this. We too have been at this quite a long time, and as quickly as we can emerge, we would like to emerge.”
Goldman also pointed to the progress that Diamond has made in the last year-and-a-half via deals with various distributors like Cox and DirecTV, as well as the deals newly approved by the court with the NBA and NHL.
MLB does not have a deal with Diamond similar to those of the NBA and NHL, but one is being discussed. If MLB teams are unsure how much local TV revenue they’ll make in 2025, they may choose to hold their wallets shut during the winter; multiple executives said this was a concern last year, ahead of what turned out to be a down winter in free agent spending.
The nine MLB teams under contract with Diamond, should it exist, for the 2025 season are: the Atlanta Braves, Cincinnati Reds, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, St. Louis Cardinals and Tampa Bay Rays.
Three other teams, the Cleveland Guardians, Minnesota Twins and Texas Rangers, are on one-year deals with Diamond that expire after this season.
Although Diamond formally filed for bankruptcy last year, Goldman said his first meeting with a lawyer for Diamond on these issues was in the fall of 2021.
“This is now the fourth season in a row that Major League Baseball is heading into the offseason with a complete lack of information and clarity with respect to what’s going to happen,” Bromley said.
How much the uncertainty should or should not affect a given team’s spending or planning could wind up a debated topic between management and those on the players’ side this winter.
According to information the Major League Baseball Players Association shared with its players this season and obtained by The Athletic, MLB teams’ local TV revenues represent 12 to 32 percent of a given team’s total revenue, with the majority of teams sitting around an average of 21 percent.
By comparison, stadium-related revenue, such as ticket sales and concessions, accounts for 39 percent of revenues on average, with central revenue — national broadcasting deals and sponsorship — amounting to 26 percent. The remaining 14 percent of MLB team revenues comes from “advertisting, promotion and other,” per the union.
MLB and the Players Association recently agreed on a change to the collective bargaining agreement that allows the commissioner’s office to distribute funds to teams who have recently taken reductions in their TV rights fees, up to $15 million per affected team. The union told its players it agreed to the change on the belief it would help player spending.
The MLBPA declined comment Tuesday.
MLB last week sent a letter to the court criticizing the lack of transparency around the terms of the NBA and NHL deals, which were filed under seal. Lopez on Tuesday said the deals should remain confidential.
Diamond told the court it has paid MLB teams about 90 percent of what they are owed for the 2024 season, and plans to pay the remainder on time. Diamond said it made a $60 million payment to MLB teams on Aug. 30, and that roughly $78 million is still to come. Then, by Oct. 1, approximately $36.5 million is to remain, with less than $20 million expected to be outstanding come Nov. 18.
“I don’t know that congratulations are necessary to thank folks for complying with their contractual obligations,” Bromley said, “but we do appreciate it.”
(Photo: David Berding / Getty Images)
