Padres deal with Bally Sports to end after network owner skips payment

Diamond Sports Group, the owner of Bally Sports San Diego and multiple regional sports networks around the country, missed its broadcasting rights payment with the Padres. 

According to Sports Business Journal reporter John Ourand, Diamond's board chose not to send payment to the baseball team by the Tuesday night deadline. The Padres subsequently chose to take back its broadcasting rights with aims of shopping them to other media companies.

Bally Sports San Diego will produce Tuesday night's game between the Padres and Miami Marlins. Major League Baseball will take over production beginning on Wednesday, utilizing the television staff as they are employed by the Padres, not Bally Sports.

Where the linear (cable, satellite, over-the-air) broadcasts end up has yet to be determined as this article was written. However, Ourand said that MLB will stream Padres games for free through Sunday.

In a statement issued to Sports Business Journal, Diamond said:

“While DSG has significant liquidity and have been making rights payments to teams, the economics of the Padres’ contract were not aligned with market realities. MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts.”

Simply put, without business jargon, Diamond Sports Group says despite sending payments to other teams, the Padres' deal doesn't work for them and MLB isn't making things easier.

Diamond Sports Group filed for bankruptcy prior to the start of the 2023 season, though its Padres deal  is not under the bankruptcy agreement since the team is the majority owner of its network. 

DSG is set to have a hearing this week, planning to argue for paying fewer teams based on economic uncertainty. Currently, the group is not paying the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers, although it was ordered to pay half of what's owed as the presiding judge deliberates. 

Sinclair Broadcasting and Entertainment Studios launched DSG after purchasing the former FOX Sports regional networks from Disney for $10.6B (Disney had to sell those channels after buying assets from 20th Century Fox in 2019). DSG essentially bet on the high demand of local sports when acquiring the regional channels but had bought platforms on the decline. 

Cord-cutting has been a significant cause of ratings erosion across all of television, with the expense of local sports channels compelling consumers to cancel linear cable packages. DSG's own direct-to-consumer package, Bally Sports Plus, has yet to make up for the shortfall.