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Saturday, February 04, 2023

MLB forms economic group as regional TV in peril

Concerned about a possible bankruptcy for the company that owns local broadcasting rights to 14 of the 30 Major League Baseball teams, the league has formed a new economic study committee that will gather next week at the owners’ meetings in Palm Beach, Florida.

The existence of the committee was disclosed to The Associated Press by a person familiar with the planning who spoke on condition of anonymity because no announcement had been made.

The committee also will examine revenue disparity among MLB clubs.

Los Angeles Dodgers chairman Mark Walter and Detroit Tigers chairman Chris Ilitch are among the committee members, the person said.

Baseball executives have said in recent weeks that the sport needs to prepare in the event that rights-fee payments are not made by Diamond Sports Group, the subsidiary of Sinclair Broadcast Group that operates networks under the name Bally Sports. Cable networks have lost subscribers and revenue in recent years due to cord-cutting.

RoyalsRetro (AG#1F) Posted: February 04, 2023 at 12:15 AM | 5 comment(s) Login to Bookmark
Tags: television rights

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1. The Duke Posted: February 04, 2023 at 05:10 PM (#6115733)

I read an article that MLB cannot exercise its contractual rights to take back broadcast rights if Sinclair files for bankruptcy - court won't allow it. Is that true ?

2. Srul Itza Posted: February 04, 2023 at 06:14 PM (#6115766)

This is an oversimplification, but here goes:

In general, in bankruptcy, particularly Chapter 11, there are rules regarding executory contracts -- contracts that are ongoing. The Debtor is given a deadline to adopt, or reject those kinds of contracts. (The deadline is often extended). The other party cannot take any action until this is decided.

If the Creditor rejects the contract, the contract is over, and the other party has the right to seek its losses in the bankruptcy, alongside other creditors, which can mean payment at a high discount. If the Debtor adopts the contract, it must cure all breaches -- for example, bring its account current.

There are nuances for mortgages and such, but that is the main thrust of the law.

3. Cris E Posted: February 05, 2023 at 02:25 PM (#6115816)

But what if there are terms in the contract requiring a certain level of performance? Would a bankruptcy override those if Sinclair can't get the games on the air? I'm not sure such terms exist, but you'd think there would be something where the teams would retain the right to break a contract if their broadcasts weren't of a certain quality or regularity.

4. Walt Davis Posted: February 06, 2023 at 01:46 PM (#6115928)

I assume MLB's concern is that Sinclair will continue to broadcast the games while not paying the rights fees. The fact that the restaurant hasn't paid for the meat in the cooler and isn't gonna pay the staff doesn't mean they aren't gonna serve as many customers as they can tonight before closing tomorrow.

If the Creditor rejects the contract, the contract is over, and the other party has the right to seek its losses in the bankruptcy, alongside other creditors, which can mean payment at a high discount. If the Debtor adopts the contract, it must cure all breaches -- for example, bring its account current.

Is that first bit a typo and meant to be "Debtor?" Otherwise I am confused. Are these deadlines really so lax that Sinclair might get to broadcast a full season (for free) before being forced to accept/reject the contract?

5. Walt Davis Posted: February 06, 2023 at 01:48 PM (#6115929)

The headline is like a bit from The Life of Brian. "We are in peril." "Don't worry, we are forming an economic group!"

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Saturday, February 04, 2023

MLB forms economic group as regional TV in peril

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