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We’ve got a few things to catch up on, so let’s hit the ground running.
Diamond declares bankruptcy
We knew it was going to happen eventually, but Diamond, the owners of Bally Broadcasting, which serves as the regional broadcasting network for a not insignificant number of MLB’s teams, declared bankruptcy. That sounds scary on the surface, but as I wrote about a few weeks back, it’s more of a sign of things to come than it is a notice of an interruption of how you consume baseball in 2023. Here’s Sportico’s Brendan Coffey with an explanation and quotes:
Diamond, whose Bally Sports-branded networks carry the games of 46 pro sports teams including many MLB, NBA and NHL franchises, filed for bankruptcy after exhausting a 30-day grace period to make a $140 million debt payment initially due on Feb. 15. The move has been anticipated for weeks, given Diamond has a total of $1.9 billion in rights fees due to the three leagues and over $600 million in payments on its $8.6 billion in debt to make in 2023 alone.
“We are utilizing this process to reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt,” Diamond Sports CEO David Preschlack said in the release. “The financial flexibility attained through this restructuring will allow DSG to evolve our business while continuing to provide exceptional live sports productions for our fans.”
In the sports world, the bankruptcy’s most immediate impact likely hits Major League Baseball, whose season gets underway at month’s end. Teams have been expecting payments for its games to begin on Opening Day and flow throughout the season—about $900 million in rights fees due this year are to baseball clubs. Bally Sports’ roster includes 14 MLB franchises, ranging alphabetically from the Arizona Diamondbacks to the Texas Rangers. MLB has pledged to produce its own broadcasts, using MLB Network and the MLB.TV app to show each team’s games, if needed, but Diamond indicates that won’t be neccessary [sic].
“DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love,” Preschlack said. “With the support of our creditors, we expect to execute a prompt and efficient reorganization and to emerge from the restructuring process as a stronger company.”
“What does Chapter 11 bankruptcy mean?” you might be asking. As Rob Mains wrote for Baseball Prospectus back in February, around when Diamond first missed its scheduled interest payment to start this 30-day clock that’s just expired, the point of Chapter 11 bankruptcy is to keep the company going. Missing payments to teams isn’t impossible, but it is “highly unlikely,” a phrase which Mains used because “In finance, we generally never say never.” Teams might be owed money by Diamond while this is sorted out, but the expectation is that they’ll end up getting it. And if they get it, then MLB doesn’t have to step in to start broadcasting any games on their own services, the contract isn’t breached, etc.
What happens after 2023, when Diamond clears the debt, is up for debate. Once there’s no more debt, maybe Diamond sells Bally to get out from under potentially amassing debt once more. Maybe MLB has to figure out a new model for broadcasting focused on streaming, sans the blackouts that plague the current local broadcast model; maybe they themselves buy Bally from Diamond, which would mean they’d also be making revenue from other sports that broadcast on those networks. That’s much more wait and see than the rest of things: going with Chapter 11 bankruptcy told us quite a bit about Diamond’s short-term plans, and it’s to keep things as business as usual as possible while unloading debt.
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Team USA’s pitching restrictions
The Athletic’s Ken Rosenthal wondered if Team USA should even bother participating in the World Baseball Classic if they’re going to be handcuffed by a pitching staff limited by restrictions, which is a question with an easy answer: of course they should! What’s aggravating, though, and the source of the query, is that there are restrictions on reliever usage that combine with the team not having some of its best starting pitcher options due to insurance issues. It would be neat if we could just watch some baseball, and if it were taken seriously by Team USA’s handlers and the parent teams whose players make up the squad. Clayton Kershaw supposedly isn’t participating despite wanting to because he couldn’t get cleared by insurance to do so, and that’s a bummer — it’s also not a unique case.
I understand why things like insurance and restrictions on relievers exist, but teams having any kind of say in whether their players can participate is pretty aggravating, and messes with the joy of the tournament. One we’re supposed to be taking seriously as fans, as something that matters. A possible solution is tough to figure out, though: do you move when the WBC happens? That seems difficult to pull off. Lessening the restrictions is a better idea, though again, how to go about that is above my pay grade. All I know is that not being able to watch someone like Kershaw go out there for Team USA when he wants to, and it in turn resulting in a lesser squad, isn’t ideal for anyone.
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Bomani Jones on “cheap ass broke boy owners”
I mostly just wanted to share this video of Bomani Jones, on his HBO show, Game Theory, criticizing a bunch of MLB owners for not spending anywhere near what they’re capable of spending.
Cheap ass broke boy owners are ruining baseball, and Bomani's naming names. pic.twitter.com/lrKj7PiSpJ
— Game Theory with Bomani Jones (@GameTheoryHBO) March 13, 2023
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I didn’t end up winning a SABR Baseball Research Award for my Baseball Prospectus piece, “1994 Explains What ‘Labor Peace’ Never Could,” but I did want to take a moment to reiterate that I’m honored that I was even nominated, and thankful for everyone who voted for me. Getting a note or an email sent to me every now and again by someone telling me they voted for me and saying good luck, that all felt pretty good, win or no. So thanks again for reading, and for your support, and hopefully there will be a third chance at taking home an award in my future!
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