Bally Sports’ broken deal with Padres could be window into future of Royals’ broadcasts
As the Royals flirted with a perfect game unlike any in Major League Baseball history on Monday, there was a familiar lament from a certain segment of the team’s fans.
I wish I could watch.
For cord-cutters, there are a few streaming options but they are not cheap. For others, blackout rules have meant they couldn’t stream Royals games.
Major League Baseball is angling to take control of local broadcasts from Bally Sports, and it will start doing so Wednesday in one market.
Diamond Sports Group, a subsidiary of Sinclair Broadcast Group which owns Bally Sports, earlier this year filed for Chapter 11 bankruptcy protection. It failed to make a payment to the San Diego Padres a few weeks ago, ESPN’s Alden Gonzalez reported, and had until Tuesday to pay the team to keep its broadcast rights. It chose not to make that payment.
According to the Sports Business Journal’s John Ourand, Diamond Sports had a 20-year, $1.2 billion deal with the Padres for Bally Sports San Diego that was supposed to run through 2032.
“Bally Sports San Diego is not part of Diamond’s bankruptcy filing because the team has an ownership stake in the (Regional Sports Network),” Ourand reported. “The team, in turn, informed Diamond that it would take its rights back.”
Starting Wednesday, Major League Baseball will air Padres games and it is lifting blackouts. MLB said it will air games on traditional outlets such as DirecTV, AT&T U-Verse, Spectrum and Cox.
Games will stream on the MLB.TV app for free through Sunday in the Padres’ in-market area. Starting Monday, it will cost $19.99 a month or $74.99 for the rest of the regular season to stream games on MLB.TV or MLB.com.
The MLB website notes this will “expand the reach of Padres games from approximately 1.130 million homes to approximately 3.264 million homes in the Padres home television territory. The increase of 2.131 million homes marks a +189% jump in reach.”
Bally Sports Kansas City’s future
Although he didn’t mention the Padres by name, Royals CEO and chairman John Sherman laid out the scenario that’s playing out in San Diego during a news conference in March.
“MLB has got a network and I think the commissioner has been clear that if anything happens with Bally’s, we’re gonna stand up that network, we’re gonna distribute the games via MLB Network and also direct to the consumer via streaming as well,” Sherman said. “But regardless of whether the management of that is local, or in central baseball, it’s going to be very localized from our broadcast crew and how we deliver games to our fans.”
Does this mean change is coming for how Royals games are broadcast? Not quite.
There are at least two ways in which the Padres’ old contract with Diamond Sports differs from the Royals’ deal.
First, the Padres had an ownership stake in Bally Sports San Diego, while the Royals do not have one with Bally Sports Kansas City. That ownership stake helped the Padres wrest control of broadcast rights.
Diamond Sports had pushed MLB to give it direct-to-consumer streaming rights for Padres games, but the league refused, as ESPN reported. Diamond Sports has streaming rights for Royals games on Bally Sports+, which is a lucrative addition to the deal with the team.
While Diamond Sports also has failed to pay its full rights fees to the Rangers, Guardians, Reds and Diamondbacks, the company said in a statement to the Athletic that it has the financial wherewithal to uphold its deals with other teams, which would include the Royals.
“While DSG has significant liquidity and has been making rights payments to teams, the economics of the Padres’ contract were not aligned with market realities,” Diamond Sports said in the statement. “MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts.”
So, for now, don’t look for a change in how Bally Sports Kansas City broadcasts Royals games and where they’re available.
But fans in KC may want to keep an eye on how things go with Padres broadcasts, as Diamond Sports works its way through bankruptcy proceedings.
Will Padres fans jump at the chance to watch now that blackout restrictions are being lifted? Will this end up being the first step in the league’s plan to take control of local television rights from Bally Sports?
The answers to those questions could have an impact on the future of Royals broadcasts.
