MLB commissioner Rob Manfred ‘prepared’ for Bally Sports’ uncertainty

Major League Baseball commissioner Rob Manfred said he is prepared for the scenario of streaming all MLB games through MLB.tv if teams decide to terminate their broadcasting agreements with Diamond Sports Group, the company that operates Bally Sports regional networks.

“We are prepared no matter what happens with respect to Diamond to make sure the games are available to fans in their local markets,” Manfred said at Cactus League Media Day on Wednesday. “We think it will be both linear in the traditional cable bundle and digitally on our own platforms, but that remains to be seen.”

After missing a $140 million interest payment, Diamond Sports Group, the company that operates Bally Sports regional networks, has entered a 30-day grace period that could lead to them filing bankruptcy.

Bally Sports Arizona holds the rights to the Arizona Diamondbacks, Phoenix Suns, Arizona Coyotes and Phoenix Mercury.

In a financial statement made by Diamond, Bally Sports has been negatively affected by diminishing subscriber numbers and the rapid shift in media consumption.

“It’s hard to escape the reality that change in media consumption has been particularly hard on RSNs (regional sports networks),” Manfred said. “Obviously, we want all of our broadcast partners to be successful. We don’t want them to have financial difficulties. We have been spending a lot of time and effort on trying to work with Diamond to figure out exactly where they are. Obviously, our first choice would be that Diamond pay the clubs what they’re contractually obligated to pay them.”

If Diamond is not able to make the payment within 30 days, MLB is not offering any compensation or extension toward the company. It has a plan to stream the regional games itself and will offer fans an option to buy an in-market game package.

“We’ve been really clear that if Diamond doesn’t pay, under every single one of the broadcast agreements, that creates a termination right, and our clubs will proceed to terminate those contracts,” Manfred said. “In the event that MLB stepped in, what we would do is we would produce the games. We would make use of our asset, the MLB Network, to do that. We would go directly to distributors — meaning Comcast, Charter, the big distributors — and make an agreement to have those games distributed on cable networks.

“We would also be seeking flexibility on the digital side so that when you look at MLB.tv, you’d go in, you can buy your out-of-market package like you’ve always had, but you would have the option to buy up into in-market games which I see as a huge improvement for fans.”

Manfred also threw out a theoretical solution for RSNs to still thrive in today’s media climate, but admitted that the longevity of them is at risk due to the the evolution of media consumption and digital variety.

“I think for a period of time, there will be a legacy cable bundle model, including RSNs,” Manfred said. “It’s gonna be smaller than what we’re used to, certainly smaller than it was in its heyday. But it’s gonna remain significant because there are economics associated there that are important to the game.

“Eventually, it may go away but I don’t think it’s a short-term phenomenon. I think it’s really important for the game to preserve the economics in the remaining RSN cable bundle while developing a digital alternative that has more flexibility and gives us better reach in terms of getting to fans who want to watch and don’t have the ability to watch.”

With the 30-day grace period ending mid-March and MLB Opening Day taking place on March 30, Diamond is expected to figure out its financial situation one way or another.

“So far, what Diamond has been saying to us is that they intend to pay the clause,” Manfred said.