Picture this: August has arrived, and with it an exciting and highly anticipated pennant race for Shohei Ohtani and Mike Trout and all the angels.
You could watch the games on MLB Network, which carries all-day baseball programming, and then broadcasts the Angels in the Los Angeles market, including an Angels pregame show and postgame show.
You can stream the games anywhere, including locally without a cable or satellite subscription, and in other geographic regions where Angels games are not currently available.
Those are some of the concepts being discussed at Major League Baseball headquarters, where league officials are trying to navigate a perilous financial dilemma and take a big step into a brave new world, where the regional sports network is an endangered species and fans pay the directly watch the team they want, however they want to watch and wherever they live.
It’s a long and uncertain road from here to there, and we have some answers.
Are the Angels about to go off the air?
No. The opener of the Cactus League remains scheduled for February 25 Bally Sports West.
What is the Dangerous Financial Dilemma?
Diamond Sports Group, which operates regional sports networks under the Bally name, said Wednesday it would not pay $140 million in payments to its backers. Diamond is widely expected to file for bankruptcy, jeopardizing the roughly $1 billion it owes this year to the 14 major league teams playing on Bally channels, including the Angels on Bally Sports West.
How much risk are the Angels taking this year?
Just over $125 million, according to a person familiar with the case who did not wish to be identified. In 2022, Forbes estimated that the Angels generated $331 million in annual revenue.
“What Diamond has told us is that they intend to pay the clubs,” commissioner Rob Manfred said at a press conference in Phoenix on Wednesday. “Many clubs have payments between today and the first day of the season, or April 1, so it’s a daily routine.”
If those payments stopped, could the league replace all of the revenue promised to the 14 teams on Bally channels?
“Not in the short term,” said Manfred.
So what would happen?
“If Diamond doesn’t pay,” said Manfred, “that creates a right to terminate under each of the broadcasting agreements, and our clubs will continue to terminate those contracts. In the event that MLB intervened, we would produce the games.
He said MLB would negotiate with cable and satellite companies to carry the games. With cable and satellite audiences dwindling, it’s doubtful the companies would be willing to pay as much as the current Bally contracts pay.
Blackout rules are designed to force fans to subscribe to cable or satellite, to protect the regional sports network’s investment. But if that network goes down — or at least no longer has an MLB team — Manfred said the league would want to offer in-market streaming packages to fans who prefer to watch their home team without a cable or satellite subscription.
How much can an Angels-only streaming package cost?
Too early to tell. Bally Sports offers streaming of its regional sports networks for $20 per month, including major league teams in some markets, but not in the Los Angeles market. In Boston, NESN offers a streaming package of the Red Sox and NHL Bruins for $30 a month.
MLB can require fans to subscribe to the leagues MLB.TV streaming servicecurrently priced at $25 a month for each out-of-market game or $130 for a single team’s games for an entire season.
“When you watch MLB.TV,” said Manfred, “you go in and you can buy your out-of-market package like you always have, but you have the option to buy in-market games, something the fan has never had before, which I see as a huge improvement for fans.”
If Diamond files for bankruptcy, can MLB execute all of these plans right away?
Probably not right away, and maybe not at all.
For Diamond, the preferred approach would be a so-called “pre-packaged bankruptcy,” in which the company says, “We can’t pay all of our bills, but we’ve made deals with our creditors.” The bankruptcy court often – but not always – approves such a package.
Diamond has asked MLB to grant the company streaming rights. MLB has been turned down because the league is not convinced that such a grant of rights would solve Diamond’s financial crisis.
Without agreement between Diamond and its creditors, the bankruptcy court makes the decisions. The court may or may not do what MLB wants.
Why is MLB so confidently proposing to produce its own broadcasts?
Fans want to watch their home team and the league believes there is money to be made. Of the 29 teams in the United States, 22 teams delivered the highest-rated prime-time programming on cable television in their market last summer. (Nielsen does not provide ratings for Canada.)
Will the Dodgers be affected by Diamond’s possible bankruptcy?
No. The Dodgers are paid for their SportsNet LA channel by Charter Communications, which generated $54 billion in revenue last year and made a profit of $5 billion.
What other local teams broadcast on the Bally channels?
The Clippers, Ducks and Kings. The Clippers are already offering fans alternatives to Bally’s regional sports network, with a team-run streaming service called Clipper Vision, and a selection of games on Channel 5.