Diamond Sports Group, the largest regional sports network in the nation, has been working to negotiate renewal agreements for carriage fees with the three largest pay-TV distributors, Comcast, Charter, and DirecTV. These negotiations are crucial for Diamond Sports as they navigate a Chapter 11 bankruptcy filing in March 2023. With the bankruptcy hearing scheduled for June 18, the successful renewal of these agreements could significantly impact the financial future of the company. The three MVPDs account for a large portion of affiliate revenue and reach millions of household subscribers, making them key partners for Diamond Sports.
Charter Communications, the second-highest pay-TV distributor with 13.5 million U.S. customers, announced a multi-year renewal agreement with Diamond Sports in April. This agreement allows subscribers to Charter’s Spectrum TV Select Plus package access to Diamond’s channels and content through the Bally’s Sports app. Similarly, a month later, a renewal agreement was reached with DirecTV, the third largest pay-TV distributor, ensuring continued access to RSN channels for DirecTV customers. In addition, Diamond Sports content can be streamed via their app, providing more ways for fans to engage with the content.
In early May, Diamond Sports also renewed their agreement with Cox Communications, a smaller pay-TV distributor. However, negotiations with Comcast, the largest pay-TV distributor in the nation, reached an impasse, resulting in the RSN being removed from Comcast’s lineup. The disagreement stemmed from issues related to cost and the tier placement of the RSN channels. Despite ongoing discussions, the blackout only affects MLB games for now, with playoff games from other leagues still accessible.
Amazon has emerged as a potential investor in Diamond Sports, offering a $115 million investment for a 15% ownership stake in the RSN. This partnership could have significant implications for the future of the company, as Amazon Prime Video would have the ability to stream games from Diamond Sports. Additionally, discussions with NBA and NHL franchises about ending their relationship after the 2023-24 season have been put on hold, with Diamond Sports offering modifications to ensure the continuation of local sporting events streaming via Amazon Prime Video.
The potential impact of Diamond Sports’ reorganization on MLB’s direct-to-consumer strategy has also been a topic of discussion. With MLB Commissioner Rob Manfred announcing plans for an in-market streaming service, the success of Diamond Sports’ restructuring could influence this strategy. If Diamond Sports successfully emerges from bankruptcy with a streaming plan in place, it could affect MLB’s timeline for launching the service, as the availability of teams for collaboration would change. Observers are anticipating the approval of Diamond Sports’ reorganization plan by the bankruptcy court, which could have far-reaching implications for the future of regional sports broadcasting and direct-to-consumer services.