Judge orders Bally Sports operator to pay Twins in full; what now?
The Minnesota Twins, Arizona Diamondbacks, Cleveland Guardians and Texas Rangers have won their case against Diamond Sports Group in U.S. Bankruptcy Court, with the judge ruling in their favor to receive full payment for the 2023 season as is directed in the previously agreed-upon contracts.
"Maybe market forces change terms of deals. But market risk is always there, inherent in every contract," said U.S. Bankruptcy Judge Christopher Lopez, making his ruling just before 6:40 p.m. CT Thursday – the second day of testimony in the Houston courtroom.
"Knowing that I think the contract rate is the reasonable and the right rate, the way that teams are locked in, the evidence that's presented before me, I'm going to find that the fees are the actual necessary cost of preserving the state," said Lopez. "The teams can keep the 75 percent I believe they've already received and they should get the [remaining] 25 percent."
The ball is now in the hands of Diamond Sports Group, which now must decide whether to make payments in full or relinquish telecast rights back to the Twins, Diamondbacks, Guardians and Rangers.
Lopez did not order a specific date for Diamond Sports Group to make that decision.
"I hope the debtors and the teams continue to talk," said Lopez.
Diamond Sports Group wanted to pay fair market value in exchange for the telecast rights and the direct-to-consumer streamer rights. The teams wanted full payment based on contracts regardless of Diamond's financial strife amid the company's bankruptcy filing earlier this year.
Twins President Dave St. Peterrevealed during testimony that Diamond inherited a 12-year contract that previous owner Fox Sports had agreed to with the Twins. That contract ends at the end of this MLB season, which meant contract extension negotiations have been held exclusively between Diamond and the Twins from March 2022 to the end of April 2023.
According to St. Peter, Diamond is contracted to pay the Twins around $60 million annually. The longtime president of the Twins said DSG offered a five-year deal that would pay the Twins approximately $54 million in 2024, with 1% escalators bringing the fee to around $56 million by 2028.
"We subsequently countered to this offer and then received a follow-up from Diamond with a a slight increase from this original offer, and that really concluded the substance of the negotiations," said St. Peter.
What happens next?
Earlier this week, Diamond relinquished telecasts rights to the San Diego Padres and Major League Baseball immediately stepped in began broadcasting Padres games the next day.
"The new arrangement gives fans the option to watch on television or stream digitally without local blackouts (subject to national exclusivities)!" the Padres announced.
In the case of the Padres, MLB produces and distributes games to local San Diego providers on DirecTV, Fubo, AT&T, Spectrum and Fubo. Fans without subscriptions to the local carriers have the option to pay $19.99 a month to watch in-market games on MLB.TV.
It's an example of what could happen with the Twins, though nothing can happen until Diamond decides to pay the full amount or forfeit the right to broadcast games.
Related: Dave St. Peter reveals how much Bally Sports owners pay Twins
Related: Twins games could be on different channels in immediate future
Source: Sports Illustrated
