Major League Baseball will take control of San Diego Padres broadcasts after Diamond Sports Group on Tuesday did not make their scheduled rights payment for Bally Sports to continue broadcasting games, per ESPN's Alden González.
Tuesday's game against the Miami Marlins will be Bally Sports' final Padres broadcast.
Diamond Sports Group was in the middle of a 20-year, $1.2 billion deal with the Padres for Bally Sports San Diego to broadcast the team's games. It was set to run through 2032.
Diamond Sports Group said in a statement, per John Ourand of Sports Business Journal:
"While DSG has significant liquidity and have been making rights payments to teams, the economics of the Padres' contract were not aligned with market realities. MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts."
Diamond Sports Group, a Sinclair subsidiary, owns the broadcasting rights for 14 MLB teams, in addition to several NBA, NHL and WNBA franchises. The company filed for Chapter 11 bankruptcy in March, and it said at the time that Bally Sports regional networks would "continue to operate in the ordinary course during the Chapter 11 process."
MLB deciding to take over San Diego's broadcasts comes as little surprise after commissioner Rob Manfred in February outlined a plan for what the league intended to do if Diamond Sports Group began missing payments.
The outline included the league trying to get games on local cable television while also creating an option for fans to stream local games.
Manfred said, per Jack Baer of Yahoo Sports:
"We've been really clear that if Diamond doesn't pay, under every single one of the broadcast agreements, that creates a termination right, and our clubs will proceed to terminate those contracts. In the event that MLB stepped in, what we would do is we would produce the games, we would make use of our asset, the MLB Network, to do that. We would go directly to distributors — meaning Comcast, Charter, the big distributors — and make an agreement to have those games distributed on cable networks.
"We would also be seeking flexibility on the digital side, so that when you look at MLB.tv, you'd go in, you can buy your out-of-market package like you've always had, but you would have the option to buy up into in-market games, which I see as a huge improvement for fans."
While teams like the Boston Red Sox and New York Yankees have benefitted from television deals, teams in smaller markets, including the Padres, Arizona Diamondbacks, Cincinnati Reds and Milwaukee Brewers, among others, have been heavily impacted by the decline of regional sports networks.