February 24, 2024

Bridge-year broadcast deals for Twins, Rangers, Guardians approved for 2024

One-year deals for Diamond Sports to continue broadcasting the Cleveland Guardians, Minnesota Twins and Texas Rangers became official Friday morning, when Judge Chris Lopez approved the contracts in bankruptcy court.

The approvals mean fans of those teams can watch TV broadcasts in 2024 as they did before, via Diamond’s Bally-branded regional sports networks. At the same time, the deals do not provide any new in-market streaming option for fans who have had trouble watching games.

In the big picture, the one-year contracts serve to make 2024 a bridge year: the teams will continue to receive rights fees, albeit at a reduced rate, and they have a runway to figure out ways to ideally expand accessibility for 2025 and beyond.

In order to watch broadcasts in 2024, fans who are inside the three teams’ respective television markets still have to subscribe to a service, like cable or satellite, that carries the team’s RSN. The Guardians are carried on Bally Sports Ohio, the Rangers on Bally Sports Southwest, and the Twins on Bally Sports North.

Fans who are out of market, meanwhile, can sign up for MLB.tv (a streaming option), or MLB Extra Innings (offered through cable and satellite providers). That is also unchanged.

But the lack of an expanded in-market streaming option is likely to disappoint fans. While Diamond has an in-market streaming service called Bally Sports Plus, none of the three teams were available on that service previously, and they still are not for 2024. The teams did not newly grant Diamond their in-market digital rights.

And it’s not like the teams can use those digital rights in an alternative way, because Diamond does not want a competing product to be available.

“They will not voluntarily, during the term of this 2024 season, allow anybody else to use those digital rights, which was important to us, essentially, as we wanted to make sure we are getting the benefit of the bargaining for the amounts we are paying,” said Andrew Goldman, a lawyer for Diamond.

Now, had the teams broken off from Diamond in 2024 and had their games broadcast elsewhere — say, by MLB itself, or another third party — the teams could have done more with their streaming rights immediately. That would have allowed more fans, particularly those without cable or satellite, to watch.

But the clubs almost certainly would have made less money in that scenario, and revenues are always the driver. The one-year deal “provides us with security regarding an incredibly important component of our financial wherewithal,” Thomas Lauria, a lawyer for the Rangers, told the judge.

“Depending on the team and the particular agreement, the broadcast rights reflect 20 to 30 percent of a team’s cash revenues during the course of the season,” Lauria continued. “This is obviously critically important to the ability of the team to meet its … obligations to make payroll, etc.”

Commissioner Rob Manfred underlined the uncertainty of this moment in a press conference on Thursday: “This is a difficult time. You know, not only — knock on wood — have we been unfamiliar with revenue declines, but … it’s kind of been a fixed number (of revenue for teams from local media). You got a contract that goes on for 15 years, and you can plug the number in.

“But we’re trying to stay close with the clubs. We’re trying to make clear that we are exploring every opportunity to get them revenue in the short term. And we’re trying to reassure them with a vision as to what it’s gonna look like longer term, so that we rebuild that source of revenue.”

With no obligation to Diamond beyond this year, the three teams could have enhanced streaming options as early as 2025. Manfred said Thursday that he hopes to introduce a national streaming package of 14 or more teams next year. Although Manfred didn’t specify individual clubs, the Rangers, Guardians and Twins are naturally candidates for inclusion because they are not under contract for 2025.

How bad is the haircut on the rights fees? The Athletic previously reported that the Guardians and Rangers are taking fee reductions of no more than 15 percent.

Prior to this arrangement, both those teams had longer-term deals in place with Diamond that went beyond 2024. But as part of the company’s bankruptcy proceedings, Diamond was threatening to drop the teams immediately unless the rights fees were re-negotiated.

Exactly how much the teams are to be paid under the revised deal is something that Goldman, the lawyer for Diamond, said both his company and MLB did not want publicized. They asked for and were granted a seal of the deals.

“They are highly confidential; they contain sensitive commercial terms,” Goldman said. “Obviously, the teams would not like these in the public forum. We are fine with that. Obviously, the commissioner’s office has seen them, because the commissioner’s office has to sign off, as they have, on amendments to telecasts rights agreements.”

The Guardians reportedly received $55 million in 2023. The average annual value of the Rangers’ 20-year deal, which began with the 2011 season, has been reported to be $111 million. Estimates, however, have varied over time.

The Twins, meanwhile, had their contract with Diamond expire after the 2023 season, so they technically negotiated a new deal. Their rights-fee reduction for this year was not immediately known.

Twins president Dave St. Peter said in court last summer that the Twins’ TV payment in 2023 was about $60 million, including the annual rights fee of $54 million, plus other related, ancillary money (such as the allocation of signing-bonus money from the deal).

The Diamond bankruptcy case is still playing out more broadly. The court this summer could approve a restructuring plan that brings Amazon in as an investor. But Friday’s approval of the three MLB-related deals “provides some comfort to the fans who are out there who want to know how they’re going to see their teams,” said Lopez, who added it was “a good message to send.”

(Top photo: David Berding / Getty Images)