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USA Today Sports Media Group
Charles Curtis

The Diamond Sports Group’s failed Padres payments and what it means for MLB and RSNs, explained

Welcome to FTW Explains, a guide to catching up on and better understanding stuff going on in the world. Have you seen a lot of stories about Diamond Sports Group declaring bankruptcy and the San Diego Padres’ broadcasts changing and what this all means for regional sports networks? We’re here to help.

Deep breaths here. This is going to be a lot, and it feels like there are monumental changes coming to the way we consume sports in the future — although, frankly, a lot of this was already in the works.

With some changes coming to the Padres’ TV broadcasts, let’s fill you in on this whole mess:

Start from the beginning here.

You got it.

Diamond Sports Group, which is part of Sinclair Broadcast Group, owns a bunch of regional sports networks, or RSNs. Those networks broadcast games for teams in MLB, the NBA and the NHL. Back in March, Diamond declared Chapter 11 bankruptcy given that it was a reported $8 billion (with a B!) in debt.

The RSNs can keep broadcasting — you might recognize them under the name Bally Sports — but there are now issues with the payments they make to teams.

What do they have to pay to teams?

Jerome Miron-USA TODAY Sports

They have to pay teams rights fees for, well, the rights to broadcast their games. And Diamond Sports Group (DSG) didn’t pay the Padres their latest fee.

More from ESPN:

Diamond, the Sinclair subsidiary that operates under the name Bally Sports, skipped its payment to the Padres a couple of weeks ago and had until the end of its grace period on Tuesday to make the team whole and maintain their long-term agreement. Choosing not to meant Tuesday’s game against the Miami Marlins was the last Padres game under the Bally Sports umbrella.

Whoa. So no more Padres on TV?

(Photo by Sean M. Haffey/Getty Images)

Not true! MLB has been waiting for this to start happening with the RSNs, and the plan is that they’ll take over the broadcasts: From paying everyone (including announcers) involved in making them to streaming games — free until Sunday, and then fans in the market can pay for and to watch on streaming, or cable users can watch on another channel — the league will be in charge.

From the league:

“As Commissioner Manfred previously stated, Major League Baseball is ready to produce and distribute Padres games to fans throughout Padres territory,” said Noah Garden, MLB Chief Revenue Officer.  “While we’re disappointed that Diamond Sports Group failed to live up to their contractual agreement with the Club, we are taking this opportunity to reimagine the distribution model, remove blackouts on local games, improve the telecast, and expand the reach of Padres games by more than 2 million homes.”

Why is this happening in the first place?

Jeff Curry-USA TODAY Sports

Cord cutting is the culprit. The Washington Post summed it up:

Cable companies have been willing to pay huge sums for those rights because they could then negotiate exclusivity in those teams’ home markets. For example, if you want to watch the Washington Nationals, you need to subscribe to a cable system that carries MASN.

But cord-cutting has changed the dynamic. With more people consuming entertainment via streaming apps, fewer are paying for cable — forcing baseball fans to make hard choices about how much their local team is worth watching to them. Instead of growing baseball’s reach, particularly among younger demographics for whom paying for cable is even more unthinkable, the traditional RSN setup reduces it.

With DSG losing money on these deals, it made sense for them not to pay the fee. And for Major League Baseball, this could expand its reach with the ability to stream games to a younger audience.

So this is ... a good thing?

(Photo by Michael Reaves/Getty Images)

Maybe in the long term? But it’s a big, complicated mess that could play out with other teams, create some short-term headaches for fans and maybe the league, and there could be some things that play out in court for a while as Diamond deals with bankruptcy and fights over payments while trying to stay afloat.

The best news? If you have one of these RSNs in charge of your broadcast, you will still get to watch your favorite team in some fashion. How? That’s what’s being worked out.

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