Contract Issues Move MLB To Take Over Production, Distribution Of Padres Games

By Barry Janoff

UPDATED June 1, 2023: ESPN: A U.S. bankruptcy judge ruled in favor of Major League Baseball and four of its teams in Houston on Thursday, forcing Diamond Sports Group, which runs broadcasts under the name Bally Sports, to fully pay the contracts in question.

Diamond, navigating through bankruptcy proceedings, argued it should pay the Minnesota Twins, Cleveland Guardians, Arizona Diamondbacks and Texas Rangers less than what the current deals call for.

Diamond owned the rights to 14 major league teams but lost the San Diego Padres earlier this week when it did not make its scheduled rights-fee payment by the end of a grace period.

MLB has since taken over Padres broadcasts. Full story here.

May 31, 2023: In the first of what could be a series of similarly significant moves, MLB today said it would take over production and distribution of all San Diego Padres locally distributed games beginning tonight (May 31) when the Padres visit the Miami Marlins.

The decision came after Diamond Sports Group — a subsidiary of Sinclair Broadcast Group that operates in the area and airs Padres games as regional sports network Bally Sports San Diego — in March filed for bankruptcy and, subsequently, “failed to live up to their contractual agreement with the club,” according to MLB.

According to ESPN, “Diamond owns the regional sports networks for 42 teams across the NHL, NBA and MLB, the latter of which comprises 14 teams. Teams who are not paid their rights fees are essentially free to break their contracts, and the Padres, who boast one of the most star-laden teams in the sport, are the first to fall out.”

MLB said the “new arrangement, which gives fans the option to watch on television or stream digitally, expands the reach of Padres games from approximately 1.130 million homes to approximately 3.264 million homes in the Padres home television territory.

“The increase of 2.131 million homes marks a +189% jump in reach.”

People can watch Padres games — which feature such high-profile players as Manny Machado, Fernando Tatis Jr., Juan Soto and Xander Bogaerts — via DirecTV, AT&T U-verse, Cox, Spectrum, Fubo and MLB.TV.

(Information about the availability of Padres games can be found here.)

“As commissioner (Rob) Manfred previously stated, Major League Baseball is ready to produce and distribute Padres games to fans throughout Padres territory,” Noah Garden, MLB chief revenue office, said via the league.

“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 two million homes.”

To make the transition "as convenient as possible," MLB said Padres games played through Sunday, June 4 would be “available for free with MLB login at MLB.com, Padres.com and in the MLB apps on mobile and connected devices.”

According to Diamond Sports Group via the company, "While DSG has significant liquidity and has been making rights payments to teams, the economics of the Padres' contract were not aligned with market realities.

“MLB has forced our hand by its continued refusal to negotiate direct-to-consumer streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts."

A hearing will be held on whether Diamond can reduce its rights fees payments to the Cleveland Guardians, Minnesota Twins, Texas Rangers and Arizona Diamondbacks, according to ESPN.

“We have been preparing for this groundbreaking moment,” Padres CEO Erik Greupner said via the team.

“The Padres are excited to be the first team to partner with Major League Baseball to offer a direct-to-consumer streaming option through MLB.TV without blackouts while preserving our in-market distribution through traditional cable and satellite television providers."

“Our fans will now have unprecedented access to Padres games on both digital and traditional platforms throughout San Diego and beyond.” — Erik Greupner

MLB and the Padres said the team’s primary TV broadcasters Don Orsillo, Mark Grant, and Bob Scanlan would continue to serve in their existing roles, while 97.3 The Fan’s radio team would remain in place as well with Jesse Agler and Tony Gwynn Jr. calling games from the booth.

“Through the power of Major League Baseball and the Padres, we are working to elevate the game broadcast experience for all Padres fans,” Billy Chambers, MLB evp-local media, said via the league.

“New technology, better picture quality and increased access are just a few of the items we are working on to better tell the story each and every night.”

Back to Home Page