Major League Baseball’s largest local broadcaster is seeking discounts on contracts to air three teams’ games in a move the league has vowed to oppose.
(Bloomberg) — Major League Baseball’s largest local broadcaster is seeking discounts on contracts to air three teams’ games in a move the league has vowed to oppose.
In a bankruptcy court hearing Thursday, Diamond Sports Group LLC’s lawyer Ross Firsenbaum told Judge Christopher Lopez that its contracts with the Minnesota Twins, Cleveland Guardians and Arizona Diamondbacks are unreasonable and worth “materially” less than what the company was paying to exclusively broadcast games in those markets through its Bally Sports brand.
Lawyers for the MLB and the three teams said company is violating its contractual obligations that require periodic payments to continue broadcasting games. The company hasn’t paid the teams since it filed for bankruptcy last month.
James Bromley, a lawyer representing the MLB Commissioner’s Office, said Diamond’s financial problems are its own doing and that if the broadcaster can’t pay, the league is prepared to broadcast games itself. The teams need the broadcast fees to pay their employees and other expenses, he said.
Lopez denied the MLB’s request to rule on the dispute on an expedited basis and instead scheduled a hearing at the end of May that could determine the value of the contracts with the three clubs.
Read more: Baseball to Open as MLB Fears Bankrupt Broadcaster Won’t Pay
Bankruptcy rules give companies in Chapter 11 wide latitude to reject burdensome contracts, but Bromley said bankruptcy doesn’t give Diamond the right to keep the broadcast deals at a reduced price.
“The only content they have, they must pay for,” Bromley said. “If this was a company that made corn bread, they’d have to pay for the corn.”
Diamond is gathering evidence to support its contention that the deals are overvalued, Firsenbaum said. Diamond may seek to get documents from MLB concerning how much the league believes broadcast rights for the Twins, Guardians and Diamondbacks are worth.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.