MLB, Diamond Clashing Over Telecast Rights Payments
Regional sports networks operator Diamond Sports Group and MLB are clashing over unpaid fees for telecast rights for Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers games. In a docket 23-90116 omnibus objection Friday, Diamond told the U.S. Bankruptcy…
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Court for the Southern District of Texas the teams are contractually obligated to give it direct-to-consumer streaming rights with MLB approval, and said MLB has been withholding approval because it wants to monetize those rights itself. Diamond said its decision not to pay the teams the full amounts due under those contracts "is therefore entirely reasonable and should come as no surprise to MLB or the Teams." Diamond said it should be allowed to use the “breathing spell” of the automatic stay of its Chapter 11 bankruptcy proceeding to make decisions about its contract portfolio. It said it's required to pay for only the “reasonable value” of what it receives under the contracts while it determines whether to assume or reject the contracts as part of its plan to emerge from bankruptcy, By filing for bankruptcy, Diamond "made the conscious decision to not pay the Diamondbacks, while continuing to exploit the benefits of the Diamondbacks’ postpetition services," the Diamondbacks said in an emergency motion last month to compel Diamond to perform under the telecast rights agreement. "Debtors are using the Clubs’ valuable, unique and exclusive intellectual property without paying a single penny for it," echoed the Guardians, Twins and MLB. The Chapter 11 "does not relieve them of their contractual commitments," the teams and MLB said. "What is extraordinary is that the Debtor RSNs continue to broadcast Twins and Guardians games with zero payment. What is extraordinary is that the Debtor RSNs ... allege that they have some 'right' to pay less than the contract rate for those games. This is not the law."