MLB teams
Alden Gonzalez, ESPN Staff Writer 365d

Sources: DSG pays rights fee to Padres to continue airing games

MLB, San Diego Padres

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

Diamond, which operates under the name Bally Sports, filed for bankruptcy on March 14 and skipped its Padres payment shortly thereafter. The missed payment triggered a two-week contractual grace period, during which Diamond tried to negotiate a way to acquire the team's streaming rights, a source familiar with the process said. Diamond did not secure those rights but will, at least for now, continue to hold on to the Padres, who stand among the most talented and decorated teams in their sport.

Diamond will still be broadcasting all 14 of the major league teams under its umbrella when the regular season begins on Thursday. But some teams are expected to be shed eventually, at which point Major League Baseball will likely take over streaming and broadcasting duties at least through the end of the season. Diamond hopes to use the bankruptcy restructuring to remain in business, but it is still evaluating its relationship with certain teams on a case-by-case basis. The Padres, for example, could find themselves in the same predicament whenever their 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 didn't pay what it owed the D-backs on March 10, but that missed payment eventually got lumped into all of the company's debt because it took place before Chapter 11 bankruptcy proceedings. MLB would essentially have to wait until another missed payment takes place in order to take over D-backs broadcasts. Teams are free to break from their contracts with Diamond whenever a missed payment occurs. MLB hopes to eventually maintain the rights for all of its teams under one umbrella, a path the league believes would ultimately be more profitable for the sport's owners.

Diamond, acting as a subsidiary to the broadcasting company Sinclair, originally purchased the RSNs from Fox in 2019, after Disney was forced to sell them off, for $10.6 billion. In the process, however, the company took on roughly $8 billion in debt, putting itself in a precarious position as the rate of cord-cutters increased. The company skipped a $140 million interest-only payment to creditors in the middle of February, triggering the 30-day grace period that led to bankruptcy.

MLB and Diamond Sports Group have both pledged that fans will not miss their teams' games while the process unfolds.

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