Local media, including radio, is 23% of MLB team revenue. It is the third biggest revenue stream after central revenue and tickets, but it is by far the biggest exposure to regional sports networks of any major U.S. sports league, and the NBA’s 13% of revenue will dip further when its next national TV deals commence in 2025. Most MLB teams are in the 18% to 25% range, but the two Los Angeles franchises lean on local media for more than 30% of their revenue after netting out their revenue sharing payments….

Baseball RSN ratings were and still are elite. Last season, it was the No. 1 programming in primetime on cable in 22 of 29 markets and 13 out of 29 when including broadcast networks, according to Nielsen (Toronto data is not available). But MLB is facing a reckoning accelerated by Diamond Sports’ $8 billion debt load. The company owes $1.92 billion in rights fees in 2023 with roughly 55% earmarked for baseball, but it skipped its $140 million debt payment in February, telegraphing last week’s bankruptcy filing.

Baseball’s audience skews older than other U.S. leagues, and the league is hoping a revamped distribution model that allows fans to access games through multiple platforms will allow it to reach a younger audience that skews higher on cord-cutters.

“The content has not suddenly gone from being valuable to being valueless,” Ed Desser, a media consultant who has negotiated more than 70 sports rights deals, said in a phone interview. “Baseball will figure out new ways to monetize it, and there are advantages to a streaming world as it allows you to have more of a direct relationship with your consumer.”

The challenge as the RSN business continues to fall is to try to come up a new model for local sports rights that eventually could replicate the revenue streams currently provided by the RSNs.

Consensus is that the push for streaming to replace the RSN model on its own will bring in only a fraction of the local media revenue that currently comes from the RSNs.

One NBA team president cited internal research that predicted its RSN rights-fee payout would drop from the mid-$30 million range per year to around $8 million if it made its games available via a direct-to-consumer service on its own.

During his press conference, Silver said he’s not concerned about recouping that RSN revenue in the long term, citing local over-the-air television stations and national streaming services that could step into the breach.

Some team executives already have started talks with local broadcast groups, such as Scripps, Gray Television and Sinclair, even if they have a couple of years left on their RSN deals. They view these talks as a way to move on from the RSN if it implodes sooner than expected.

Take the RSN that operates in Phoenix — Bally Sports Arizona — for example. Due to a combination of cord cutting and its distribution deals, the RSN only reaches 40% of the Phoenix market. League and team officials expect that percentage to continue to drop.

While Diamond Sports Group appears set to default on $140 million in interest payments, a move which is expected to trigger a bankruptcy filing in the coming weeks, its 19 Bally Sports properties aren’t the only RSNs feeling a financial pinch. According to multiple league, finance and network sources, the three AT&T SportsNet brands in recent weeks have handed over lighter-than-expected envelopes to their respective MLB franchise partners.

An executive with direct knowledge of the RSNs’ financial dealings confirmed to Sportico that the AT&T outlets in Denver, Houston and Pittsburgh submitted their most recent rights payments to their MLB clubs in a timely fashion, although the disbursements were not commensurate with the contracted rates. The teams impacted by the shortfall are the Colorado Rockies, Houston Astros and Pittsburgh Pirates.

The precise amount of the funds withheld is not known but is said to be significant enough to have catalyzed concerns about the long-term viability of the three networks. According to one insider, the partial payments may be interpreted as a signal that new-ish owners Warner Bros. Discovery are eager to get out of the RSN business.

Diamond Sports Group, a collection of 19 regional sports networks (RSNs) doing business as Bally Sports, is planning to file for bankruptcy next week, according to multiple people familiar with the plan. The group currently controls the local broadcast rights to more than 40 teams in the NBA, NHL and MLB, and its bankruptcy would be a significant blow to the cable network model that has lucratively buoyed U.S. sports for the past 50 years.
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For the affected teams, including the Miami Heat, St. Louis Cardinals and Tampa Bay Lightning, the bankruptcy will trigger a number of questions. For instance, what happens with payment owed to the teams during the Chapter 11 process? More concerning, what do local sports media rights look like in the aftermath, and will leagues like the NBA or MLB get involved more directly?

America’s largest owner of local sports channels is heading toward a complex $8.6 billion debt restructuring in bankruptcy court as it stakes its future on a new direct-to-consumer streaming service.

After leveraging up to buy regional sports networks from Walt Disney Co. in 2019, Diamond Sports Group LLC is suffering from a decline in cable-TV subscribers, spurring negotiations with creditors and major sports leagues about its viability as a going concern. The outcome will have serious implications for the $55 billion world of sports-media rights: the company’s channels showcase Major League Baseball, National Basketball Association and National Hockey League games to fans from Detroit and Phoenix to San Diego.

With financial troubles mounting, the Sinclair Broadcast Group Inc.-owned firm will likely skip $140 million in interest payments due mid-February, kickstarting a 30-day grace period, according to people familiar with the matter. A stark divide is emerging between would-be winners and losers: its $630 million first-lien loan is trading at 92 cents on the dollar, while nearly $5 billion of lower-ranked bonds change hands for under 10 cents — signaling a near-total wipeout for subordinated creditors.

How all this goes down matters. If Diamond, which operates under the Bally Sports brand, files for bankruptcy, it could potentially put at risk crucial broadcasting-rights revenue for the likes of MLB.