DSG makes 'progress' with Comcast on MLB deal (2024)

Baseball fans with Comcast subscriptions who have been unable to watch their teams for most of this season might be in for some good news.

Diamond Sports Group, the bankrupt operator of Bally Sports channels, said in a status conference Wednesday that it has made "substantial progress" on a deal with Comcast, a development that could get baseball games back on the air throughout the country.

Diamond, 16 months into Chapter 11 restructuring, had a confirmation hearing scheduled for early next week but asked Judge Chris Lopez for more time in hopes of finalizing a new deal with Comcast, as well as the NBA and the NHL.

"We believe that we have made substantial progress on resolving our issues with Comcast, and we have the intention of fully documenting and executing an agreement with Comcast to broadcast our RSNs in the very near term," Diamond attorney Brian Hermann said in court, alluding to Diamond's regional sports networks.

A spokesperson for Comcast declined comment, as did a spokesperson for Major League Baseball.

Talks between Comcast and Diamond previously broke down because Comcast wanted to place Diamond channels on a higher, more-expensive tier -- a stance Comcast had continually held firm on. An agreement between the two sides could include fans having to pay more to watch Bally Sports channels, although details are still unknown.

Comcast, Diamond's third-largest distributor, pulled all of its Bally Sports channels off the air at the start of May after the two sides failed to agree on a contract extension. Diamond owns the linear television rights for 12 MLB teams, but Comcast is most prevalent in markets where the Atlanta Braves, Minnesota Twins, Detroit Tigers, Kansas City Royals, Tampa Bay Rays and Miami Marlins play. Fans of the Marlins, Rays, Royals and Tigers have Bally Sports' streaming app as an in-market option, but that is not the case for Braves and Twins fans. (MLB's streaming arm, MLB.tv, is blacked out in-market throughout the country due to exclusivity provisions.)

Diamond had previously postponed its confirmation hearing by about six weeks, from June 18 to July 29 and 30, angering NBA and NHL executives, who feared that uncertainty was creeping too close to the start of their upcoming seasons.

Hermann intimated that this latest postponement won't last as long.

"It is not lost on the debtors that we need to move quickly," Hermann said. "We have been moving quickly, and we will continue to move quickly to get to confirmation."

MLB and the MLB Players' Association has finalized what amounts to a reallocation of the money generated from teams exceeding the luxury-tax threshold to benefit clubs that have experienced losses in local-media revenue, sources told ESPN, confirming an initial report by The Athletic.

MLB and the MLBPA split the aggregate amount teams pay as penalties for going over the luxury-tax thresholds, which amounted to over $200 million last year and is estimated to reach $300 million this year. MLBPA uses it to fund players' retirement accounts. Under the current Collective Bargaining Agreement, a "Supplemental Commissioner's Discretionary Fund" was created for MLB's half, designed to reward teams that not only receive revenue sharing but also grow revenues in areas outside of local media.

Under the new provision, currently in place for this year only, MLB can use half of its portion -- estimated to be about $75 million -- for teams that it considers to have suffered losses in local-media revenue, regardless of whether they're classified as a revenue-sharing team. The maximum is $15 million per team, applying to those who sustained local-media losses in 2022 or 2023. The amount cannot exceed what it lost in local-media revenue, however.

Under the agreement, signed Tuesday, teams must be notified how much they'll receive under this classification by Dec. 9. The MLBPA is hopeful this can serve as an added incentive for teams to spend on players in hopes of avoiding some of the inactivity that plagued last offseason.

Diamond had secured multiyear deals with 10 of its 12 largest distributors, but the absence of Comcast loomed large, greatly compromising its ability to emerge from bankruptcy. Of the dozen MLB teams under Diamond's portfolio, three teams -- the Cleveland Guardians, Texas Rangers and Twins -- are on expiring deals. Diamond held the rights for 15 NBA teams and 11 NHL teams, but the digital portion of those deals expired at the end of the leagues' 2023-24 seasons.

"The plan will be to come forward with a confirmation schedule that is swift and can get the company out of bankruptcy well ahead of the start of the seasons for the NBA and the NHL," Hermann said in court. "I will also undertake on behalf of the company that if we conclude that we cannot reorganize the business, which is a possibility, we will similarly pivot quickly and [ask] for the court to discuss the best way to proceed from there. That's not our focus today, but that is a possibility, and it's not lost on us."