After 20 months of monitoring the Diamond Sports Group bankruptcy case, it wasn’t at all surprising to hear Judge Christopher Lopez couch his ruling on the long-simmering matter in baseball terms. A self-professed enthusiast of the grand old game, Judge Lopez has peppered his commentary from the bench with asides about his Texas Rangers ever since the case first came before him in March 2023.
“There’s going to be somebody who’s going to turn on their television and be able to watch the Detroit Tigers play, and that’s really important,” Judge Lopez said Thursday, as he prepared to close the books on the long-running bankruptcy case. “It sounds not-important, but it’s important. If you’ve had a stressful day and you want to … go home and enjoy the game with family, rooting for your team is just as much a part of the American experience as anything else.”
The nod to the Pastime came on the heels of Judge Lopez’s approval of Diamond’s re-organization plan, one that will see the owner and operator of the 16 FanDuel Sports Network RSNs enter the 2025 season with deals in place with at least six Major League Baseball clubs. And while that headcount reflects a significant reduction compared to the 14 MLB franchises Diamond had partnered with before it filed for Chapter 11 protection, it’s worth noting that the company looked to be down to a single baseball partner as recently as a month ago.
Returning to their respective legacy RSNs for the 2025 season are the Atlanta Braves, Detroit Tigers, Los Angeles Angels, Miami Marlins, St. Louis Cardinals and Tampa Bay Rays. After a flurry of late deal-making that practically overlapped with the start of Thursday morning’s hearing, Diamond has secured in-market streaming rights for each of the six clubs. Talks with the Kansas City Royals, the sole remaining team without a formal contract, are ongoing.
Diamond’s MLB partnerships are crucial to its standing as a year-round delivery system for in-market sports, as baseball is largely the only game in town during the bulk of its six-month season. The company’s winter slate is relatively overstuffed, as 13 NBA teams and eight NHL clubs have agreed to stick it out with their local channels, bringing the total number of team commitments to 27. Before the bankruptcy proceedings began, Diamond held the rights to 42 teams across 19 networks, a roster that included 16 NBA, 14 MLB and 12 NHL partners.
In a statement issued shortly after the approval was granted, Diamond said it expects to complete the restructuring process “in the coming weeks.” Under the terms of the plan, Diamond will have slashed its debt load from some $8.67 billion to $200 million.
While Judge Lopez’s ruling frees Diamond of a considerable amount of baggage, the endemic challenges of the pay-TV space aren’t about to vanish alongside the company’s voided IOUs. According to projections filed to the court Thursday, Diamond expects to lose another 26% of its TV subscribers by 2027, with its linear base expected to shrink from 22.6 million customers to 16.7 million. Even with a projected gain of 2.3 million direct-to-consumer subs, the RSNs are still looking at an overall loss of some 3.6 million paying customers within the next three years.
The pay-TV bundle is devolving at such a rapid clip that even the old-school pioneers of the cable model are struggling to engage with the full breadth of their fan base. According to Atlanta Braves president and CEO Derek Schiller, the club that was all but ubiquitous during the old SuperStation days now reaches just 35% of the consumers who reside in its massive TV footprint. (The Braves’ territory ranges beyond the Peach State and into adjacent markets throughout Alabama, Mississippi, Tennessee and the Carolinas.) About 15 years ago, the Braves’ reach was closer to 80%.
As one might expect, the losses on the distribution side of the ledger are expected to take a bite out of Diamond’s cash-generating activities. Per the same filing, Diamond estimates that linear distribution revenues will slump 47% in three years’ time, falling from $1.48 billion in 2024 to $776 million in 2027. The advertising outlook looks to be quite a bit more stable, with sponsorship revenues expected to slip 18% in the same period, from $368 million to $302 million.
Because so many of the Diamond renewals have been structured around discounted fees, the company should save a bundle on rights costs. The RSNs are expected to reduce compensation to their team partners from just shy of $1.5 billion this year to $982 million in 2027, good for a savings of nearly 35%.
If Diamond still has its work cut out for it, at least one team partner seems cautiously optimistic about the company’s outlook. “We are extremely hopeful that they’re going to be successful,” Schiller said. “Getting out of bankruptcy is the first step toward them being a more successful entity. The second step is a reconstituted deal with us, where we’re getting things that we want and they’re getting things that they want. … It’s a positive on both sides and something that we’re actually really excited about.”
In the near term, at least, an awful lot of people will likely benefit from Diamond’s imminent escape from bankruptcy. As Judge Lopez noted at the conclusion of the confirmation hearing, while the astronomical dollar amounts in play tend to make outsiders interpret legal matters like the Diamond saga through the lens of Big Business, it would be a mistake to overlook the plights of the anonymous individuals who have a stake in the case. Next week, the judge will be turning his attention to a number of personal bankruptcy cases, and while such matters are seemingly prosaic in the grand scheme of things, they are of singular importance to the people trying to save their homes and cars.
“Today, you’re going to save a lot of jobs,” the judge said Thursday at the end of the company’s confirmation hearing. “There are a lot of folks who may not understand the technical terms we’ve used today … but they’re going to get a paycheck now.”
As part of a final bit of housekeeping before Diamond finalizes its reorganization, the company parted ways with the Cincinnati Reds, which had owned a 20% stake in their hometown RSN. Diamond bought the club’s stake for $1, and shortly after the split was made official, MLB Media announced that it would produce and distribute Cincy’s games next season.
In a characteristic gesture, one in keeping with his advocacy for the little guy, the judge began the proceedings by congratulating his law clerks for having just passed the Texas Bar Exam. Nearly every attorney who addressed the court made a point of acknowledging the clerks’ achievements. It made for a series of very human moments at the conclusion of a process that wasn’t always collegial.
“This case was no layup, not for anyone,” said Judge Lopez, before thanking the various attorneys and mediators who toiled on the case for the last 20 months. “A lot of hard work went into this.” And with that, he signed the final order.
