The Arizona Diamondbacks will join the San Diego Padres in an elite group of Major League Baseball teams whose regional sports network contracts have been torn up by bankrupt Diamond Sports Group.
Diamond filed a motion on Monday with the U.S. Bankruptcy Court in Houston overseeing its restructuring to move on from the Diamondbacks, with which it had been locked into a profitless, 20-year, $1.5 billion local TV rights marriage.
UPDATED: On Tuesday morning, the court gave the go-ahead for Diamond to reject the Diamondbacks' contract.
“Given the inability to reach an agreement with the Diamondbacks and MLB, we have rejected that rights contract, which had financial terms that were not aligned with Diamond’s long-term plans. We are no longer broadcasting Diamondbacks games. We value the relationships we have built with the Diamondbacks and their passionate fans, and we wish them the best going forward," Diamond said in a statement provided to Next TV.
“Importantly, we are continuing to broadcast games for all other teams under contract without disruption and we anticipate making all rights payments to the remainder of the MLB teams in our portfolio through the end of this season.”
Diamond, a subsidiary of Sinclair Broadcast Group, has been losing money on that deal and a number of other contracts for MLB teams in the regional sports network group it operates, branded Bally Sports. Chapter 11 law allows Diamond to worm its way out of deals it doesn't like.
Major League Baseball is stepping in and will help the Diamondbacks establish new TV distribution with pay TV operators.
The league announced a new channel and distribution arrangement for the team on Tuesday.
The league already facilitated a similar move for the Padres in May, after the team rejected Diamond’s demand to shrink its local rights fee and surrender its direct-to-consumer streaming rights to subscription service Bally Sports Plus.
Diamond actually filed an earlier motion to reject the Diamondbacks contract back on June 22, but the subsidiary and the club entered late negotiations to try to hammer out an agreement.
MLB and its commissioner, Rob Manfred, were said to be vehemently opposed to any capitulation on behalf of the team.
Diamond's move to cut the Diamondbacks isn't surprising. Also on Monday, the subsidiary formally surrendered its legal objection from the team’s Bally Sports Arizona roommates, the NBA's Phoenix Suns and WNBA's Phoenix Mercury, from moving on from the RSN to a new local TV distribution deal with free over-the-air broadcaster Gray Television.
It's unclear as to what will happen, local TV-wise, to the remaining Bally Sports Arizona tenant, the NHL’s Arizona Coyotes.
Also over the weekend, Diamondbacks play-by-play crews on Bally Sports Arizona began informing viewers that their team might soon start appearing on a new channel.
Diamond entered bankruptcy in March, looking to shed $8 billion in debt created when its parent company, Sinclair, purchased 19 Fox Sports Net RSNs for $10.6 billion.
