D-backs could be 1st team impacted by Bally Sports ownership bankruptcy

The Arizona Diamondbacks could be one of the first teams impacted as Diamond Sports Group prepares to file for bankruptcy.

The operator of the 19 Bally Sports regional television networks has continued to pay its rights fees to every Major League Baseball team with the exception of the Diamondbacks, reports John Ourand of Sports Business Journal.

Diamond released this statement: “We’ve been making our rights payments to teams with the exception of the Diamondbacks, where we have exercised a contractual grace period in order to maximize flexibility, especially given that we do not have DTC rights. We are continuing to broadcast games and are operating our business as usual.”

Ourand reports that the grace period to pay the D-backs ends at midnight on Thursday.

He adds that Diamond has not paid the D-backs because the deal is extremely team-friendly in comparison to other clubs. It also runs through 2035.

If Diamond does not pay Arizona by next week, it is not expected to impact Diamondbacks fans watching games immediately, according to Ourand. MLB would begin fighting to take on the rights through bankruptcy court if that occurred.

During that time, Ourand’s sources indicate Bally Sports Arizona will continue producing the games for TV so it can keep being paid by cable and satellite distributors.

In other words, it’s hard to lay out a timeline for potential changes in how fans consume the D-backs because of the legal process.

Diamond is expected to file for bankruptcy by next Friday, the end of a 30-day grace period after the company missed a $140 million interest payment on Feb. 15.

The grace period has allowed Diamond time to negotiate with creditors and restructure its debt. Another avenue could be the prearranged Chapter 11 bankruptcy filing.

MLB commissioner Rob Manfred has said his league is prepared for any fallout from Diamond’s financial situation.

Bally Sports Arizona also carries games for the Phoenix Suns, Arizona Coyotes and Phoenix Mercury. Ourand reports that both the NBA and NHL have financial reasons to remain committed to their contracts with Diamond, at least for the time being.

But if the tie between Diamond and the Diamondbacks is cut, the company could have to renegotiate its deal with television distributors.

In some cases, rebate clauses already are built into these deals that spell out how much less the distributor must pay the RSN if it loses one of its teams. If the contract does not have that language, the RSN will try to renegotiate a new rate.

Follow @AZSports