Diamond Sports Group (owner of Bally RSNs) files for Chapter 11 bankruptcy, MLB to produce Padres games after missed payment

[jsnpritchett]

1 hour ago, Hubs said:

Once again, Bally Sports West is not one of the RSN's in major trouble. This Bankruptcy isn't about these networks model not being profitable, it's that Sinclair (whom honestly shouldn't have been able to purchase what they Did, how they did) took on far too much debt to acquire them. They financed the purchase almost entirely, in a subsidiary, and now they are regretting having that debt as rights fees escalate.

Cable companies know live sports is the the major reason for people to not cut the cord.

The model might change, but I do not foresee the Angels having issues with their RSN. It will most likely be sold to another entity with MLB's blessing, and then they can explore in market and out of market streaming.

I could also see the leagues themselves buying back the channels, honestly, with the MLB getting the majority of the channel (purely because they have the most games broadcast), unless the NBA or NHL team is an immensely popular one.

 

 

If you have specific information that shows how BSW is doing financially, please let me know.  I've been unable to find any info on market-level economics, even in Diamond/Sinclair's quarterly statements.

Also: "cable companies know live sports is the major reason for people to not cut the cord"--yet tens of millions of people have done just that over the last few years.  Sure, a good number of those who are still sticking around are doing so because of sports--but the economics still don't make much sense for many providers, which is why a bunch of them have dropped RSNs.  To continue to ignore that seems bizarre.

And, again, you've given zero concrete evidence that the overall revenue from rights deals will be anywhere near where it is now if the transition is made to a mostly/only streaming model, regardless of whether it's controlled by MLB, the individual teams, or another entity.

[Hubs]

2 hours ago, jsnpritchett said:

If you have specific information that shows how BSW is doing financially, please let me know.  I've been unable to find any info on market-level economics, even in Diamond/Sinclair's quarterly statements.

Also: "cable companies know live sports is the major reason for people to not cut the cord"--yet tens of millions of people have done just that over the last few years.  Sure, a good number of those who are still sticking around are doing so because of sports--but the economics still don't make much sense for many providers, which is why a bunch of them have dropped RSNs.  To continue to ignore that seems bizarre.

And, again, you've given zero concrete evidence that the overall revenue from rights deals will be anywhere near where it is now if the transition is made to a mostly/only streaming model, regardless of whether it's controlled by MLB, the individual teams, or another entity.

If I had financial Data I would've shared it. I think you and others assume this is gonna be disastrous because we're all used to worst case scenario. Is the market changing? absolutely. Is this the reason for the bankruptcy? No. It's Diamond/Sinclairs purchase that did this. If other RSN's were going bankrupt, sure, then it's a problem, but really they overvalued and overbid, massively financed the deal, and put zero of their own money into it. They didn't make as much as they thought they would due to Covid and cord cutters, and now they went into chapter 11 to reorganize and hopefully discharge debt. 

They are the problem, not rights fees. They made a bad business deal and are trying to get out of it. 

[Hubs]

https://www.nexttv.com/news/new-ceo-to-run-diamond-sports-as-sinclair-gets-sent-to-the-bench

This article talks about the potential sale, and the debt, and the rights fees (Ie what the Angels get from the network) skyrocketing. 

Most likely outcome, Arte and Steve and Henry buy FSW/BSW rename it, and make $$$$.. 

 

[Hubs]

https://blogs.fangraphs.com/diamond-sports-groups-bankruptcy-could-rock-the-baseball-revenue-boat/

 

This does a really good job of understanding what I believe and read into the bankruptcy and all its financial details and why its happening, and what it means.

Edited January 30, 2023 by Hubs

[Hubs]

 

1 minute ago, Hubs said:

https://blogs.fangraphs.com/diamond-sports-groups-bankruptcy-could-rock-the-baseball-revenue-boat/

From this article:

 

One thing that should give teams at least a small sliver of confidence: this bankruptcy has to do with debt service, not a catastrophic business failure. In 2021, DSG was profitable before interest payments, taxes, depreciation, and amortization – they recorded a positive EBITDA, as they say in finance. The same was true in 2020, and while we don’t yet have financial statements for full-year 2022, the group was profitable on an EBITDA basis for the first nine months of 2022. Sure, cord cutting and economic turbulence might have put a crimp in expected profits, but the books still balance – at least, if not for those pesky debt payments, which totaled $436 million in 2021 and $415 million in the first nine months of 2022.

[Hubs]

FYI:

DSG holds local broadcast rights for 14 teams: the Arizona Diamondbacks, Atlanta Braves (note: an earlier version of this article omitted the Braves), Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays, and Texas Rangers. They also own minority stakes in the Marquee network, which broadcasts Chicago Cubs games, and YES Network, which broadcasts New York Yankees games...

 

I'd say the most profitable ones are the Angels and Cardinals. Maybe Texas.

[jsnpritchett]

1 minute ago, Hubs said:

FYI:

DSG holds local broadcast rights for 14 teams: the Arizona Diamondbacks, Atlanta Braves (note: an earlier version of this article omitted the Braves), Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays, and Texas Rangers. They also own minority stakes in the Marquee network, which broadcasts Chicago Cubs games, and YES Network, which broadcasts New York Yankees games...

 

I'd say the most profitable ones are the Angels and Cardinals. Maybe Texas.

...but you don't know, which is the issue.  You have continually said similar things, with little to back it up (and most of the articles you've posted in the last few minutes don't actually say what you seem to be thinking they're saying).  The Angels have pretty low viewership on BSW, yet their rights fee is close to the highest in baseball.  That's not sustainable.

And if the Angels take over BSW and manage it, you do realize that the "rights fee" becomes simply a transfer of money from one entity to another within the same overall corporate umbrella, right?  Carriage fees from cable/satellite providers will be a fraction of what BSW is currently getting (evidence for this comes from the fact that many carriers are already refusing to carry it)--and if fewer people are subscribing, then ad rates go down.

Continuing to believe that local sports rights are going to be an ever-increasing revenue stream is probably a fool's errand.  There's no putting the genie back in the bottle once the shift to streaming occurs (and it has already started).  While it'll still be a few more years before cable/satellite is gone or in the minority in terms of how people access sports and other entertainment, it's coming.

[Hubs]

10 minutes ago, Hubs said:

FYI:

DSG holds local broadcast rights for 14 teams: the Arizona Diamondbacks, Atlanta Braves (note: an earlier version of this article omitted the Braves), Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays, and Texas Rangers. They also own minority stakes in the Marquee network, which broadcasts Chicago Cubs games, and YES Network, which broadcasts New York Yankees games...

 

I'd say the most profitable ones are the Angels and Cardinals. Maybe Texas.

And the Braves.

[Hubs]

https://dodgerblue.com/mlb-teams-receive-at-least-100-million-annually-from-tv-rights-contracts/2022/02/12/

Angels would be getting $150 from BSW...and 60 Million from National Broadcasts.

 

[TempeAngel]

On 1/25/2023 at 2:10 PM, TempeAngel said:

The YES Network is all about the Yankees and the Nets with other companies having a piece of the pie.

Arte could partner up with Ballmer and the Clippers and replicate that.

I agree.

[TempeAngel]

30 minutes ago, Hubs said:

https://www.nexttv.com/news/new-ceo-to-run-diamond-sports-as-sinclair-gets-sent-to-the-bench

This article talks about the potential sale, and the debt, and the rights fees (Ie what the Angels get from the network) skyrocketing. 

Most likely outcome, Arte and Steve and Henry buy FSW/BSW rename it, and make $$$$.. 

 

I agree.

[jsnpritchett]

12 minutes ago, Hubs said:

https://dodgerblue.com/mlb-teams-receive-at-least-100-million-annually-from-tv-rights-contracts/2022/02/12/

Angels would be getting $150 from BSW...and 60 Million from National Broadcasts.

 

They won't get that if Diamond goes bankrupt, nor would they get it if any new entity came in. 

[Lhalo]

36 minutes ago, Hubs said:

https://blogs.fangraphs.com/diamond-sports-groups-bankruptcy-could-rock-the-baseball-revenue-boat/

 

This does a really good job of understanding what I believe and read into the bankruptcy and all its financial details and why its happening, and what it means.

Interesting read. Thanks.

[Duren, Duren]

How will this affect packages like MLB Extra Innings and NHL Center Ice? Which have mostly Bally feeds. Including the Angels and Ducks respectively.

I assume they will fill in with whoever gets the primary contracts, but you never know. The hockey package is much more comprehensive. Extra Innings only carried about half the Angels games. Frustrating because often there weren't many other games on at the same time. 

[gotbeer]

20 minutes ago, Hubs said:

https://dodgerblue.com/mlb-teams-receive-at-least-100-million-annually-from-tv-rights-contracts/2022/02/12/

Angels would be getting $150 from BSW...and 60 Million from National Broadcasts.

 

Angels are getting $150 million from BSW.  

There are 5.5 million cable subscribers in all of Calolfornia.

https://calcable.org/broadband-future/#:~:text=5.5 million California Cable Subscribers,million VoIP and Telephone Customers

Even if you split between north and south evenly, that's 2.7 million each. We won't even get into Doggie fans and SD vs LA.  

That would be $150 million/2.7 million or $54.54 a year or $4.54 a month per subscriber.

Doesn't sound like much, but that doesn't even figure in the Clippers rights fees, the Ducks rights fees, and all the costs associated with broadcasting all the games.  

I highly doubt that Diamond is profitable in this area.  That $150 million is great for a team.  But for a service that is losing customers on a daily basis, that's a Pujols like boat anchor.

[gotbeer]

12 minutes ago, Duren, Duren said:

How will this affect packages like MLB Extra Innings and NHL Center Ice? Which have mostly Bally feeds. Including the Angels and Ducks respectively.

I assume they will fill in with whoever gets the primary contracts, but you never know. The hockey package is much more comprehensive. Extra Innings only carried about half the Angels games. Frustrating because often there weren't many other games on at the same time. 

From what I understand.  The Diamond Bankruptcy is not looking to terminate the company.  So more than likely they will continue to broadcast games.  What they are trying to do is get protection from creditors, which the rights fees are a part of.  

It's a complicated mess, because if the teams say we want out, they immediately get sent to the stone age of the 70s and 80s where only a few games (mainly national) that get broadcast.  Remember, the teams do not own the cameras, broadcast vans, have the contracts with the cable companies, even the broadcasters, etc.  That's all Diamond/Bally's.  

This is why the MLB/NBA/NHL is even looking at the extreme case of buying Diamond out, to protect those right fees and broadcast capabilities.

[jsnpritchett]

This three-part article is a year old now, but it's a great overview of the potential landscape of sports on TV moving forward:

https://www.thescore.com/news/228661

On another note: some of you continue to suggest that one possibility is that the Angels would be able to somehow miraculously either start their own network with cable/satellite carriage and/or start a streaming service.  I've also seen at least one person (maybe more?) suggest they'd be willing to pay $50/month to have the ability to watch Angels games.  I will point out that the only way RSNs have survived for as long as they have until this point is that they rarely (if ever) focus on only one sport and they also have to license content from other providers/sports leagues to fill their programming slates.  An Angels-only (or even Angels-centric) network/streaming option in today's world would (as I've said a number of times already) not come remotely close to producing the same net proceeds that the current rights deal with BSW does.

The last numbers I could find suggested that the average Angels broadcast on BSW was watched by somewhere around 100,000 viewers (that's actually higher than I originally thought).  From a network/RSN standpoint, the great thing about cable and satellite carriage fees is they're passive: everyone who subscribes to the service at all results in a monthly fee from the provider to the network.  With direct-to-consumer offerings, though, it's obviously a different game: you have to motivate people to actively subscribe.  Given that the average Angels game draws 100K viewers (and BSW's LA Kings games get even fewer), how are you going to motivate enough people to subscribe month-to-month?  And if you're doing direct-to-consumer, are you doing multiple tiers, with different prices points depending on whether or not the consumer sees ads? 

All of this is mostly just to say that the situation is nowhere near as simple as some folks in this thread seem to think it is.  Contrary to what Hubs said, I'm not looking at a "worst-case scenario--but I'm also not assuming that something magical will happen that will result in the same or more money for the Angels in a manner that makes the games easier (or at least no more difficult) to access for the average fan.

[Lhalo]

1 hour ago, jsnpritchett said:

Given that the average Angels game draws 100K viewers (and BSW's LA Kings games get even fewer), how are you going to motivate enough people to subscribe month-to-month

My first suggestion for The Angels would be to quit sucking at baseball. Secondly I’d add a little T&A to the channel. Perhaps a lingerie bowl, girls on trampolines, etc. I’m just spitballing here. 

[Revad]

8 hours ago, Hubs said:

https://blogs.fangraphs.com/diamond-sports-groups-bankruptcy-could-rock-the-baseball-revenue-boat/

 

This does a really good job of understanding what I believe and read into the bankruptcy and all its financial details and why its happening, and what it means.

Ben Clemens is really good.

[Chuck]

17 hours ago, Hubs said:

https://www.nexttv.com/news/new-ceo-to-run-diamond-sports-as-sinclair-gets-sent-to-the-bench

This article talks about the potential sale, and the debt, and the rights fees (Ie what the Angels get from the network) skyrocketing. 

Most likely outcome, Arte and Steve and Henry buy FSW/BSW rename it, and make $$$$.. 

 

hmmmm. Interesting! 

[Taylor]

14 hours ago, Lhalo said:

My first suggestion for The Angels would be to quit sucking at baseball. Secondly I’d add a little T&A to the channel. Perhaps a lingerie bowl, girls on trampolines, etc. I’m just spitballing here. 

Just add videos of Trout and Ohtani working out and hitting BP bombs to seductive saxophone music.

[Lhalo]

1 hour ago, Chuckster70 said:

hmmmm. Interesting! 

I wonder why their app doesn't include the Angels logo?

[Chuck]

30 minutes ago, Lhalo said:

I wonder why their app doesn't include the Angels logo?

[jsnpritchett]

42 minutes ago, Lhalo said:

I wonder why their app doesn't include the Angels logo?

Maybe because that's Bally Sports SoCal, not Bally Sports West. Also,  the Angels aren't included in the direct-to-consumer app because BSW doesn't have streaming rights to the Angels-- so even if you were looking at BSW, they wouldn't be listed.  Ha ha. 

[Lhalo]

1 minute ago, jsnpritchett said:

Maybe because that's Bally Sports SoCal, not Bally Sports West. Also,  the Angels aren't included in the direct-to-consumer app because BSW doesn't have streaming rights to the Angels-- so even if you were looking at BSW, they wouldn't be listed.  Ha ha. 

So $20 a month and you don't even get baseball? Solid.