David Preschlack, meet Mark Twain.
You know, the guy who uttered that line, “The reports of my demise are greatly exaggerated”?
Mr. Preschlack took on the unenviable task of trying to find a path for survival for Diamond Sports, a subsidiary of Sinclair Broadcasting that has been operating the remnants of the once-dominant regional sports network portfolio built by FOX which Sinclair overaggressively took off the hands of the Disney company that agreed to temporarily warehouse them when they acquired the non-news media assets of the Murdoch family. He spent most of 2023 navigating various lawsuits and actions, many of which did not go his way. As recently as last week, a proposed lifeline from Amazon was rejected by Major League Baseball, mostly because it dramatically undervalued MLB believes its content is worth.
Well, surprise, surprise, because yesterday VARIETY’s Todd Spangler reported that, at least for now, he’ll be able to keep his current job:
Diamond Sports Group has put together a plan to emerge from bankruptcy and remain a going concern, helped by a big new streaming deal with Amazon.
Amazon has committed to making a minority investment in Diamond Sports Group, one of the largest operators of regional sports networks (RSNs) in the country, as part of Diamond’s bankruptcy reorganization plan, the RSN company announced Wednesday.
Under the terms of Amazon’s investment, the tech giant will enter into a commercial arrangement to provide access to Diamond’s services via Prime Video. Prime Video will become Diamond’s primary partner through which customers will be able to purchase direct-to-consumer access to stream local Diamond channels. Customers will be able to access all local DTC content, including live MLB, NBA and NHL games, and pre- and post-game programming, for the teams for which Diamond retains DTC rights, through Prime Video Channels.
Diamond Sports, the bankrupt broadcaster that carries the rights to 37 sports teams across MLB, the NBA and NHL, has arranged a $450 million plan with creditors that would allow it to continue operating beyond 2024, pending the approval of a federal bankruptcy judge. The reorganization plan is significant not only for the involvement of a powerhouse streaming company, Amazon and its Prime service, but because otherwise, Diamond might have been headed for liquidation at the end of 2024.
Well, that was simple. Triple the number, make people happy–well, happi-ER.
The winter sports leagues’ short-term situations seem a bit clearer; moreover, we’ve also seen an openness of sorely needed inclusiveness to spread the wealth:
The deal between Diamond Sports and the NBA amended the rights agreements between the company and the teams in contract with Bally Sports RSNs so that the broadcast and digital rights to those 15 franchises would all revert to the NBA and teams after the 2023-24 season, instead of the original longer agreements. It also carved out the ability for those teams to broadcast a number of their games on over-the-air channels in their local markets. The Pelicans and Hawks have already done so and have scheduled 10 games each on broadcast television in their markets. The NHL then did the same last month. “It’s a resolution that we are comfortable with in light of the totality of circumstances,” NHL deputy commissioner Bill Daly told The Athletic at the time.
As for the more combative back-and-forth with MLB goes, there is detente–for now.
Diamond is poised to retain the long-term contracts it has with most of its MLB teams, but three clubs are still up in the air, the Guardians and Rangers (under contract), plus the Twins (out of contract).
“We have nine clubs that are clearly in the fold and for whom we will absolutely broadcast for the 2024 season and absolutely pay for the 2024 season,” Andrew Goldman, another lawyer for Diamond, said. Goldman added that would be true even if the overall plan proposed Wednesday were not implemented.
For the other three teams, Goldman said, “We will broadcast those three teams for the 2024 season on the terms and conditions that we have, in a different context, and with Judge Isgur’s help, agreement on in terms of pricing.”
But it’s pretty clear which port MLB is attempting to steer this ocean liner gone astray toward, especially given the terseness and ambiguity of their reaction to yesterday’s news. Per the ASSOCIATED PRESS’ Joe Reedy:
“There is a lot to digest. It is unable to be digested because it hasn’t been purchased, cooked or served. When we get to that point, we will look at it and figure out whether it is able to be digested,” MLB lawyer James Bromley said during the hearing. “We will refrain from adding congratulations until such time that something is actually delivered.”
Look, I know MLB has their own oars in the water–they’re still nowhere close to the number they’ve placed on their content. But Preschlack got arguably an even bigger headache off his plate yesterday as well, as Spengler elaborated:
Diamond also announced Wednesday that it has an agreement in principle with parent Sinclair to settle the pending litigation between the companies. In July 2023, Diamond sued Sinclair alleging the company had fraudulently withdrawn as much as $1.5 billion from the RSN business. Under the settlement, among other things, Sinclair will pay Diamond $495 million in cash and provide “ongoing management and transition services to support Diamond’s reorganization and separation from Sinclair’s operations.”
And if you have any idea how much effort that took for Sinclair to throw money at this problem, I might urge you to check out our sister site’s musing about the history and current priorities of its head.
So at least there’s some reason for optimism that something long-term might be possible with Preschlack now front and center. And indeed, the best news of all might have been this throwaway note from the ATHLETIC’s intrepid duo:
The new deal would also bring Diamond’s stations a new name. The regional sports networks that carry Diamond teams are branded with the Bally name, but a new partner would be sought for 2025 and beyond.
Baby steps? Perhaps. But that’s how you need to tread when you’re trying to best handle a fragile Diamond.
And especially when you’re trying to prove Mark Twain to be prescient.