The Texas Rangers have become the fifth of the 14 Major League Baseball teams under the Bally Sports umbrella not to receive their regional sports network fees from Sinclair's Diamond Sports Group for the new 2023 season.
The club has joined a motion filed by MLB to the Texas bankruptcy court overseeing the restructuring of debt-ridden Diamond, which continues to broadcast games for the five teams it hasn't paid.
MLB wants the court to terminate the contracts for the unpaid teams so it can step in and help them stream their games to fans. Diamond, which is trying to shed $8 billion of debt, wants business to proceed as usual until the court can restructure its money-losing deals with individual team.
Also read: Diamond Does It: Files for Bankruptcy Looking to Shed $8 Billion in Bally Sports Debt
“That ‘there ain’t no such thing as a free lunch’ is a well-recognized, simple, but axiomatic economic principle,” the Rangers wrote in the court filing. “Everyone understands it -- everyone, apparently, except the Debtors [Diamond]. Here, they are getting lunch -- using the right to create content based on the Rangers’ baseball games, and in turn selling that content to distributors -- but without paying for it.
“The Rangers now join the growing list of MLB teams being held hostage by the Debtors," the motion added.
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In 2010, the Rangers entered a 20-year, $3 billion deal with Fox Sports Southwest, one of 19 Fox-owned regional sports network channels purchased in 2019 by Sinclair Broadcast Group for $10.6 billion. Sinclair subsequently set up a subsidiary, Diamond, to manage the channels, which were rebranded as "Bally Sports."
Cord-cutting, as well as fast-increasing team rights fees, cut margins on the channels from around 50% to well under 20%.
The Athletic pegged the Rangers' annual rights check at around $111 million.
Earlier this week, the Sports Business Journal reported that Diamond had missed the payment deadline for the Cincinnati Reds. This followed earlier missed payments to the Arizona Diamondbacks, Cleveland Guardians and Minnesota Twins.
With the Reds owning a piece of Bally Sports Ohio, Sports Business Journal reported that the club is able to use existing production resources and is probably closest to taking over its own game broadcasts.
In all, Diamond has RSN contracts with 52 pro teams across MLB, the National Basketball Association and the National Hockey League.
