CLEVELAND — From pressure washing the stadium concourse to hanging fresh banners on the nearby street lights, crews were hard at work Thursday getting Progressive Field ready for the Guardians’ home opener on Friday afternoon. In addition to carefully watching the pitch clock, Guardians fans are anxiously monitoring the ongoing bankruptcy proceedings for Diamond Sports Group, the parent company of the team’s broadcast partner, Bally Sports.
On April 1, Diamond Sports Group failed to make its multi-million dollar broadcasting rights payment to the Guardians, triggering a 15-day grace period in which Bally could still make payment, which is estimated to be in the range of $50 million. On Thursday, Major League Baseball filed an emergency motion in the broadcaster’s bankruptcy case, urging the court to compel Diamond Sports Group to make payment. In the event that Diamond Sports Group fails to make the payment, the contract between the Guardians and Bally Sports could be terminated, allowing the team and Major League Baseball to regain the broadcasting rights.
Guardians super fans, Tami Rohr and her daughter, Betsy Thompson, said Bally Sports’ ongoing financial woes have been distressing, especially given the uncertainty.
“We are not tied to cable; we stream… I was really hoping that Bally Sports had gotten this app working and we could stream specifically for them. That obviously did not come to fruition,” Thompson said. “I’m just hoping that we’ll be able to watch the Guardians when they are on the road.”
The speed in which Bally’s financial condition has deteriorated has left many fans and industry insiders surprised.
In 2019, Diamond Sports Group, a subsidiary of Sinclair Broadcasting, acquired several regional sports networks formerly run by Fox Sports, which the Walt Disney Corp. was forced to divest as a condition of Disney’s acquisition of 21st Century Fox. As part of the $10 billion deal, Diamond Sports Group assumed ownership of 14 regional sports networks and inherited their agreements for the licensing and broadcasting rights for more than a dozen teams, including the Cleveland Guardians.
The acquisitions have been nothing short of disastrous for Bally Sports as the COVID-19 pandemic and early season lockout last year dug severely into the company’s bottom line. In an effort to shed some of its $8 billion in debt, Diamond Sports Group filed for bankruptcy in mid-March.
A greater willingness for consumers to "cut the cord" proved to be unsurmountable for the fledgling network.
“Regional sports contracts have become a larger portion of all the dollars flowing into a lot of baseball teams over the past 20 years or so,” said Jonathan Ernest, a Case Western professor that teaches sports economics. “It’s been this fight to keep people bundling into this subscription to baseball games with the rest of a cable package when people are deciding to drop that whole package and ordering off of individual menus instead.”
If Bally Sports fails to make the payment by April 13, the Guardians and Major League Baseball appear ready to terminate the agreement, potentially setting the stage for the league to assume production and distribution responsibilities. Commissioner Rob Manfred has previously stated that MLB stands at the ready to assume broadcasting duties if Bally were to totally unravel. Additionally, it could create an opportunity for the league to end regional blackouts, which has long been a priority for the league.
However, a direct-to-consumer model could result in MLB receiving less revenue than what is currently generated through the cable TV and regional sports networks model.
“They need to do something. The question is whether they do something like a temporary bridge that gets them through this season and maintains that connection to fans… or do they transition and [maintain the cable model]? How many fans do they lose?” Ernest said. “Fans would like to see a removal of the blackout restrictions but the blackout restrictions are there and taking advantage of the fact that local fans are much more willing to pay for this content.”
Whatever happens, fans can still expect to watch the Guardians this season — one way or the other.
“The left-up-in-the-air aspect of it is what’s frustrating. I don’t relish the idea of refreshing and clicking Cleveland Guardians and Google over and over again just to see what’s happening in a game,” said Thompson. “We kind of don’t know what’s going on right now.”
