Sources – DSG pays rights fees to the Padres to continue broadcasting games

SAN DIEGO — Diamond Sports Group, operator of 42 regional sports networks across the MLB, NBA and NHL, paid the rights fee to the San Diego Padres on Wednesday, meaning the company will continue to air the team’s games in the near future, sources told ESPN.

Diamond, operating under the name Bally Sports, filed for bankruptcy on March 14 and skipped payments to the Padres shortly thereafter. A source familiar with the process said the missed payment caused a two-week contractual grace period, during which Diamond tried to negotiate a way to obtain the team’s broadcast rights. Diamond didn’t secure those rights but, at least for the time being, he’ll continue to stick to the Padres, who stand among the most talented and decorated teams in their sport.

Diamond will still be airing all 14 major league teams under its umbrella when the regular season begins on Thursday. But some of the teams are expected to eventually be eliminated, at which point Major League Baseball will likely take over broadcasting and streaming duties for at least the rest of the season. Diamond hopes to use bankruptcy restructuring to stay in business, but it’s still assessing its relationship with certain teams on a case-by-case basis. The Padres, for example, can find themselves in the same predicament whenever the next payment is due.

The other 13 teams under the Diamond Sports Group umbrella include the Arizona Diamondbacks, Detroit Tigers, Miami Marlins, Cleveland Guardians, Kansas City Royals, St. Louis Cardinals, Minnesota Twins, Cincinnati Reds, Los Angeles Angels, Atlanta Braves, Texas Rangers, Tampa Bay Rays and Milwaukee Brewers.

Diamond did not pay the D-backs due on March 10, but those missed payments eventually collated into all of the company’s debts because they occurred before the Chapter 11 bankruptcy proceedings. Essentially MLB would have to wait for another missed payment in order to take over the D-backs’ broadcasts. Teams are free to break their contracts with the Diamond when a missed payment occurs. MLB hopes to eventually keep the rights to all of its teams under one umbrella, a path the league believes will ultimately be more profitable for sports owners.

Diamond, as a subsidiary of broadcaster Sinclair, originally purchased the RSNs from Fox in 2019, after Disney was forced to sell them for $10.6 billion. But in the process, the company took on nearly $8 billion in debt, putting itself in a precarious position as the rate of cord cutting increased. The company forgoes paying $140 million in interest-only to creditors in mid-February, triggering a 30-day grace period that led to bankruptcy.

MLB and Diamond Sports Group pledged that fans would not miss their teams’ games while the process was underway.