Teams rely on their media partnerships. Not only does some of that money pay salaries, but without the TV deals fans can’t watch their teams. The Padres had a TV deal with Bally Sports before they went bankrupt over a year ago. Because of the Bankruptcy, they had terminated their deal with the Padres organization. However, they had agreed to still pay the $78.9 Million that they owed San Diego.
The parent company of the TV company, Diamond Sports Group filed the bankruptcy in March 2023. The other team that Bally Sports had cut ties with was the Arizona Diamondbacks.
Later, the Padres had filed an arbitration claim that sought an award of $162 million, according to the settlement agreement, following the May 31, 2023 DSG termination of the Bally Sports broadcast contract. The two sides agreed to mediation a month after the claim.
Shortly after, the Padres and Bally Sports (DSG) struck a deal that stipulated an initial payment of $10,496,366. Later, a second payment totaling 62.5% of the assets of the liquidated San Diego RSN would be made.
“In recognition of the risks, uncertainty, and expense of further litigation, among other factors, each of the Padres and RSNCo exercised its business judgment to resolve their dispute, which the Parties believe reflects a reasonable compromise of the Padres’ claim for breach of contract asserted in the Demand, when taking into account all relevant facts and circumstances,” the settlement agreement said. RSNCo is the corporate entity partially owned by DSG that operated the RSN.
Bally Sports San Diego was a joint venture between Padres and Diamond. Technically, its not fully closed because it must be shuttered through the bankruptcy process. In the settlement, the Diamond Sports group described the San Diego RSN as “unable to generate sufficient revenue to independently support the rights fee payments under its telecast rights agreement with the Padres and to pay other operating expenses. The Debtors therefore had, when necessary, funded RSNCo to make up for the deficiency, including by extending $20.5 million in aggregate principal amount of loans to RSNCo during the 2022 MLB season.”
Losing Bally Sports San Diego resulted in the Padres having to take out a loan at the end of the 2023 season as well. It’s unclear if the Padres have reached any sort of settlement agreement with DSG.
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