Diamond Sports Group loses San Diego Padres TV rights amid bankruptcy
Illustration: Aïda Amer/Axios
Diamond Sports Group's bankruptcy entered a new phase after it gave away its rights to the San Diego Padres.
Why it matters: Major League Baseball wants to take over its teams' local TV rights and broadcast games themselves. The Padres get to be their crash test dummy.
Driving the news: Diamond relinquished its TV rights for the Padres back to the team after it informed the club it would not make its next scheduled rights payment.
- Major League Baseball will produce the games starting tonight and make them free through its MLB.tv streaming service through Sunday, then offer a special subscription option for Padres fans in San Diego. The games will also be distributed across DirecTV, AT&T, Cox, Spectrum and Fubo.
- In a statement, a Diamond spokesperson said 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."
- Diamond was losing money on its 20-year, $1.2 billion deal with the team, per Sports Business Journal.
Of note: In making the announcement, MLB said the new arrangement will increase the Padres' footprint by more than 2 million homes.
What's next: The Padres may not be the last team that Diamond sheds while in bankruptcy.
- Diamond has held back some of its rights payments to four other MLB teams — Cleveland Guardians, Cincinnati Reds, Arizona Diamondbacks and Texas Rangers — who are seeking a court order to either pay them their full fee or relinquish those TV rights.
- Diamond is arguing it should be paying less because the amount of people paying for cable TV is significantly less than when it made those deals.
- A hearing is taking place today, with a ruling expected.
The bottom line: Diamond has shown a willingness to walk away from bad deals.
