Diamond Sports Group, the nation’s largest regional sports network, has been working on renewing carriage fees agreements with the three largest pay-TV distributors, Comcast, Charter, and DirecTV. These negotiations are crucial for the financial restructuring of Diamond Sports, which filed for Chapter 11 in March 2023. A bankruptcy hearing is scheduled for June 18, and a successful renewal could significantly impact the future of the RSN.
Charter Communications renewed their distribution package with Diamond Sports in early April, allowing subscribers to access Diamond’s channels and stream content on the Bally’s Sports app. Charter is the second-largest pay-TV distributor with 13.5 million U.S. customers. DirecTV, the third-largest distributor, also reached a renewal agreement with Diamond Sports, ensuring access to RSN content for their customers. Additionally, Cox Communications, a smaller distributor, also renewed their agreement with Diamond Sports in early May.
However, negotiations with Comcast hit a roadblock, resulting in the removal of the RSN from the nation’s largest pay-TV distributor. The disagreement stemmed from issues such as cost and the placement of RSN channels on different tiers. This blackout will only impact MLB games, as playoff games across the NBA and NHL are still available. On the other hand, Amazon has shown interest in investing $115 million in Diamond Sports, potentially providing a 15% ownership stake. This investment could allow Amazon Prime Video to stream games from Diamond Sports.
Diamond Sports had previously considered ceasing operations and ending relationships with NBA and NHL franchises. However, these discussions seem to have been put on hold, with efforts to secure a longer agreement with franchises to allow Amazon Prime Video to stream local sporting events. This could potentially impact MLB’s direct-to-consumer strategy, which aims to launch an in-market streaming service. If Diamond Sports successfully restructures and emerges from bankruptcy protection, it could affect MLB’s plans to launch the service.
The reorganization plan for Diamond Sports is set to be reviewed by the U.S. Bankruptcy Court on June 18. If the plan is approved, it could impact MLB’s plans to launch a nationwide direct-to-consumer service, as some teams are still under agreements with Diamond Sports. With only a few teams currently able to participate in MLB’s streaming service, the success of Diamond Sports’ reorganization plan is crucial for the future of both the RSN and MLB’s streaming strategy. Most observers believe the bankruptcy court will approve Diamond Sports’ reorganization plan, but the outcome remains to be seen.
