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Rob Manfred: Diamond Threatened Bankruptcy as Negotiation for Streaming Rights

“I’m going to put the entity into bankruptcy and then I’m going to selectively reject contracts.”

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Rob Manfred

Yesterday’s bankruptcy hearing between Major League Baseball (MLB) and Diamond Sports Group (DSG) was, in a word, acrimonious. The first day of testimony to determine whether or not Diamond Sports Group is obligated to pay the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers the full sum of their television rights contracts contained explosive details of business processes and the relationship between the plaintiff and defendant.

It took place just one day after Diamond Sports Group neglected not to pay the San Diego Padres their latest rights payment and relinquished the team’s local broadcast rights to the league itself. While it may seem somewhat abrupt, this practice is a means of contract termination permitted under Chapter 11 bankruptcy.

The league, however, was prepared for such a scenario and is ready to take over local broadcasts for the 13 other teams airing on Bally Sports’ regional sports networks (RSNs). Commissioner Rob Manfred divulged that in order to make up for lost profits, the league will pay the afflicted teams a minimum of 80% the money owed.

“We arrived at that number as something that would prevent financial distress at the club level, [the] ability to pay players and those things,” Manfred said. “We wanted them to have enough cash flow to prevent a disruption of our business.”

Manfred detailed the league’s discomfit with public comments made by president and chief executive officer of Sinclair Broadcast Group, Chris Ripley. Manfred said Ripley outlined his goal of creating a digital business that would require gambling, merchandising and ticketing rights that the company simply did not possess, and was subsequently raising public funds from that rhetoric. Manfred says he told Ripley on several occasions that what he was doing was irresponsible and that Sinclair Broadcast Group would not secure those rights.

Sinclair Broadcast Group executive chairman David Smith met with Manfred in New York, N.Y. where he requested the company receive direct-to-consumer broadcast rights to strengthen its Bally Sports Plus app. Diamond Sports Group chief executive officer David Preschlack revealed the app currently has approximately 203,000 subscribers, only 55% of the corporate goal.

Manfred vehemently shot down Smith’s proposal, explaining that people cannot always get what they want. Smith, who invested $2 billion in the purchase of the regional sports network, outlined exactly the way things would, and have, played out.

“He said, ‘So what I’m going to do [is] I’m going to keep this going long enough until I get my $2 billion out, and then I’m going to start squeezing your clubs to take their rights fees down in order to make sure that I stay profitable in the RSN business. And if they don’t agree to that, I’m going to put the entity into bankruptcy and then I’m going to selectively reject contracts,’” the Major League Baseball Commissioner said.

He responded vowing the league would serve its fans by being prepared to produce and distribute broadcasts themselves every time the company rejects or even threatens rejection of a contract.

“RSNs, whoever the hell owned them, had made hundreds and hundreds of millions of dollars in profit off these long-term agreements,” Manfred said. “And we felt that because they had enjoyed that long period of huge profits, that when things started to look like they were maybe not quite as profitable – to turn around and say, ‘We’re going to squeeze you and make you take lower rights fees,’ didn’t sit very well with us.”

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FOX Sports Moving UFL Games to Friday Nights in 2025

“The regular season average television audience of 816,000 was more than 30% higher than the pace from the previous year.”

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The United Football League logo

FOX Sports CEO Eric Shanks recently confirmed a report from Deadline last month that said United Football League games would move to Friday nights in 2025. The Deadline report had said FOX planned to replace WWE Smackdown with sports coverage from college football and basketball as well as games from the UFL.

Shanks’ comments were made during a Zoom with reporters about the news of their new agreement with the NTT IndyCar Series. SI’s Mike Mitchell reported that the UFL worked with FOX to move the games so they could complete their auto racing deal.

Shanks said many of FOX’s UFL games would be moved to Friday night when asked about the change but did not provide more detail.

The UFL was split between FOX and ABC/ESPN this season. The regular season average television audience of 816,000 was more than 30% higher than the pace from the previous year and the recent conference championship games were up 57% over the averages from the USFL and XFL last season. According to Mitchell, the league saw a large increase in the 18-49 demographic on FOX compared to USFL programming in 2023.

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Report: WNBA Could Quadruple Media Rights Fees

Under the current structure, the WNBA makes a reported $60 million annually from its media rights deals with The Walt Disney Company, Amazon’s Prime Video, CBS and Ion.

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(Illustration) | Courtesy: Women's National Basketball Association

The NBA is reportedly in the process of formalizing new media rights deals with The Walt Disney Company, NBCUniversal and Amazon’s Prime Video expected to be worth a collective $76 billion over the course of the deal. At the same time, the NBA is also negotiating media rights for the WNBA in which it has an ownership stake of approximately 60%. The WNBA could quadruple its annual media rights fee within these negotiations, according to a new report from Michael McCarthy of Front Office Sports.

Under the current structure, the WNBA makes a reported $60 million annually from its media rights deals with The Walt Disney Company, Amazon’s Prime Video, CBS and Ion. Throughout the season thus far, the WNBA has seen its ratings increase, drawing more than 1 million viewers across several matchups throughout the regular season. Moreover, discussion surrounding the league is further assimilating into the sports vernacular surrounding stars such as Caitlin Clark, A’ja Wilson, Sabrina Ionescu and Breanna Stewart.

Ben Strauss of The Washington Post outlined how the NBA is in the process of considering one total bid from media companies that combines the value of media rights for the NBA and WNBA. With the league itself determining the value of media rights for the WNBA, he argues that it could either be “rocket fuel” for the league or that its augmented popularity “is more of an afterthought.” The possibility exists that it could be a combination of both extremes as well, but by having the league negotiate its media rights deal, quantifying the true value could be a more difficult task.

In a report from earlier in the year, McCarthy stated that the WNBA is likely to negotiate its own separate media rights deal if it is not receiving the remuneration that it wants. The WNBA attained its most-watched opening month in league history, averaging 1.32 million viewers for games across ABC, ESPN, ESPN2, CBS, Ion and NBA TV. Moreover, the league had its most-attended opening month in its 26-year history with 400,000 fans at games through the end of May and a rise in sales of WNBA-branded merchandise by 236% year-over-year.

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NBA Finals Game 3 Up 2% on ABC and ESPN

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Graphic for the NBA Finals

Game 3 of the NBA Finals series which saw Boston take a three games to none lead in the series was up 2% from last year’s Game 3. The game averaged 11,426,000 viewers and peaked at 13,926,000 at 10:45 p.m. ET.

The game was the top draw in all of television for the night and took the top spot in all of the key demographics. So far through three games, the series is even with the television numbers from 2023.

NBA Countdown, the show which airs right before the game begins, was also up two percent compared to the same show a year ago. NBA Countdown averaged 4,330,000 viewers. Through three games, the show is up five percent from last season’s pregame shows.

The Celtics will look to secure their 18th NBA Championship when the two teams meet again for Game 4 tonight at 8:30 ET. If a Game 5 is necessary, it would be played on Monday, June 17.

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