SAN DIEGO — Tuesday is Bally Sports San Diego’s last Padres broadcast.
Parent company Diamond Sports missed both last week’s payment and is letting the grace period expire without a payment on Tuesday, triggering the return of broadcast rights to the Padres and Major League Baseball.
MLB had been positioning itself to take over broadcasts amid bankruptcy proceedings aimed at eliminating more than $8 billion in Diamond’s outstanding debt.
That begins Wednesday, with free streaming through the end of the weekend on MLB’s apps, at MLB.com and Padres.com. MLB is working through direct-to-consumer streaming subscription options for after the weekend and has already secured deals with local cable networks to carry Padres games.
Channel lineups will be announced shortly.
An important byproduct of this landmark development: the local blackout policy will be lifted in San Diego.
The Padres’ on-screen broadcast teams will also remain in place as they are team employees.
A Diamond spokesperson passed along a company statement:
“Diamond Sports Group (DSG) has decided not to provide additional funding to the San Diego RSN that would enable it to make the rights payment to the San Diego Padres during the grace period and will no longer be broadcasting Padres games after Tuesday, May 30. While DSG has significant liquidity and has been making rights payments to teams, the economics of the Padres’ contract were not aligned with market realities. MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts.”
Diamond made an 11th-hour payment on their 20-year, $1.2 billion contract with the Padres — roughly $60 million a year through 2032 — on the eve of opening day, although that deal had been highlighted as one that was especially troublesome for the company amid the cord-cutting era.
Court filings in March had shown that Diamond had lost 22 million subscribers and $810 million in revenue over the last four years. The 22.6% decline was due in part to distributors like YouTube TV and Hulu+ Live TV dropping Bally Sports regional networks across the country.
Diamond owns the rights to stream games of five of their 14 MLB partners. Their desire to purchase the rest at fair value —including the Padres’ streaming rights — had been rebuffed by MLB, a significant hurdle in Diamond’s hopes to make up for lost revenue.
An MLB attorney argued in court in March that Diamond could not force teams to provide additional streaming rights, nor was it the league’s responsibility to fix a “broken model” that had once played a significant role in baseball’s growing economy.
Sinclair purchased Fox Sports Networks for $10.6 billion in 2019 and established Diamond Sports as its regional sports network branch. Diamond is looking to separate from Sinclair as a standalone company during bankruptcy. Those proceedings do not include the Padres’ deal because the team owns a 20% stake in Bally Sports San Diego (formerly Fox Sports San Diego) as agreed upon during the deal that was signed in 2012, when Ron Fowler and Peter Seidler purchased the Padres.