MLB has ‘grave concerns’ for Diamond reorg plan

Alden Gonzalez, ESPN Staff WriterNov 8, 2024, 04:53 PM ET

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Major League Baseball and the Atlanta Braves formally filed an objection to Diamond Sports Group’s reorganization plan on Friday, citing, among other things, a lack of information to corroborate the viability of the company’s projections. In a motion filed in Houston bankruptcy court, MLB and the Braves wrote they possess “grave concerns that, if the plan is confirmed, there is a substantial likelihood that the debtors will find themselves once again in financial distress and/or bankruptcy court in the near future.”

Later on Friday, the Cincinnati Reds officially split from Diamond, according to another court filing.

Diamond, approaching 20 months in Chapter 11 bankruptcy, is scheduled to begin its confirmation hearing next Thursday, during which a federal judge will determine whether to approve the operator’s go-forward plan. Diamond held regional-sports-network contracts with 12 MLB teams during the 2024 season but decided last month to keep only the Braves deal under its current iteration while hoping to negotiate new terms with some of the other clubs. Five teams have since departed.

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On Oct. 8, the Milwaukee Brewers, Cleveland Guardians and Minnesota Twins joined MLB, which will broadcast at least six teams during the 2025 season, while the Texas Rangers announced they would explore local media alternatives. The Reds broke away precisely one month later, though it is unclear whether they too will join MLB.

With six days remaining until Diamond’s confirmation hearing, the Tampa Bay Rays, Detroit Tigers, Los Angeles Angels and Kansas City Royals remain in limbo. Like the Reds, the Royals and Angels are joint-venture teams that maintain partial ownership of their RSNs and thus are not formally part of the bankruptcy process. An emergency motion described the Reds’ departure from Diamond as a “consensual termination” after the two sides could not agree to renegotiated terms, while adding that contracts for the NBA’s Cleveland Cavaliers and NHL’s Columbus Blue Jackets will be unaffected.

Diamond, which recently rebranded from Bally Sports to FanDuel Sports, currently has linear and digital rights deals with 13 NBA and eight NHL teams. In addition to obtaining clarity with its remaining MLB teams, Diamond is also hoping to finalize a commercial arrangement with Amazon that would allow it access to Amazon’s direct-to-consumer platform, Prime Video.

MLB and the Braves cited a lack of clarity on that deal among their concerns in Friday’s objection, writing that Diamond’s “refusal to produce information concerning the proposed commercial lynchpin of the go-forward business plan as to [direct-to-consumer] subscribers, a subscriber base that the debtors estimate in the financial projections to grow by hundreds of percentage points between now and the end of 2027, by itself justifies a finding that the debtors cannot meet their feasibility burden.”

MLB and the Braves added that Diamond has “consistently failed to produce” information about its new distribution agreements to allow for cross-examination in the linear-cable space and that they should not be “compelled to partner with a business that does not have a realistic roadmap to future operations.”

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