NEWSLETTER
Yesterday we learned that the Guardians were the latest team to see payroll possibly impacted by the Diamond Sports bankruptcy and possible loss of their TV deal with the Bally RSN that Diamond owns. Now we know, via The Athletic, that Diamond is indeed looking to drop the Guardians’ deal.
And the World Champion Texas Rangers, too:
Even the 2023 World Series winner is not wholly immune to the disrupted cable TV landscape.
If the request succeeds, it’ll make for the fourth and fifth teams to have its deal dropped by Diamond during the bankruptcy (Guardians, Rangers, Twins, Diamondbacks, Padres).
There would then be nine Bally teams remaining for 2024, and even then, there’s still no guarantee that those deals will ACTUALLY pay out all season long or carry forward from there (Cardinals, Tigers, Marlins, Reds, Royals, Angels, Braves, Rays, Brewers). This is still probably a really under-discussed story in terms of offseason impact. It’s a whole lot of teams with a whole lot of uncertainty about a decent chunk of their revenue going forward. I think some of them are simply going to be dramatically less active than they otherwise would’ve been.
Back to these two teams.
For the Guardians, the drop could mean a substantial reduction in the $55 million they could have otherwise received in 2024 for their broadcast rights. If it’s cut in half, that’d represent a 10% drop in revenue (according to the revenue estimates from Forbes). Pretty hard to see how that WOULDN’T impact payroll.
For the Rangers, they might have even more to lose, since their Bally deal was reportedly paying them an average of $110 million per year, one of the larger TV deals in baseball. A halving for them would be more like a 15% drop in revenue.
The Rangers are looking at a huge revenue bump this year thanks to the deep playoff run and World Series win, and it’s possible they have no concerns about finding a new TV home that would pay them closer to that $110 million annual mark (I reaaaaaally doubt that they could find a deal that lucrative these days, but maybe). I don’t know that their offseason plans would be as impacted as the Padres, Twins, and Guardians (the Diamondbacks also have a lot of extra playoff cash). But longer-term? With the massive contracts they already have on the books? It’s pretty hard for me to see how they wouldn’t at least be concerned about the uncertainty.
Oh, also: I have no idea how they’d make it happen, since teams individually control their own local rights, but MLB is presumably going to strongggggly encourage these teams not to give up exclusivities (blackouts) on their local rights if they sign new deals. Remember, MLB is hoping the RSN implosion’s one saving grace is that they can reclaim all/most of the local rights, and then create a centralized streaming product with no blackouts.
