Over 50 Pro Teams Could Lose Massive Revenue And Franchises Like The St. Louis Cardinals Might Have To Cut Payroll As Bally Sports Regional Networks Prepare For Bankruptcy

Jakub Porzycki. Shutterstock Images.

Nexttv.com - Culminating perhaps the biggest financial disaster in sports media history, Diamond Sports Group, the heavily indebted subsidiary that manages Sinclair Broadcast Group's 19 Bally Sports-branded regional sports networks, is headed for bankruptcy. 

Bloomberg was first to report(opens in new tab) Wednesday that Diamond will probably skip a mid-February $140 million interest-only payment servicing around $8.6 billion in debt as it prepares for a Chapter 11 restructuring that will roil the $55 billion U.S. sports media business. 

During its third-quarter earnings report in November, Sinclair said that it hired advisers LionTree and Moelis & Co. to “talk to parties about deleveraging, strategic partnerships and things of that nature.”

At that time, the consensus belief was that either one or all of Diamond's pro league partners from the NBA, NHL or Major League Baseball would either have to step in and assume an ownership stake, or the RSN operator would have to restructure in early 2023. 

The latter appears to be happening. 

If you are a fan of one of 15 MLB teams, 17 NBA teams, 14 NHL teams, and handful of others who have their games on Bally Sports Network then you have probably swore at your TV as the stupid app fails to load for a seventh straight time. I did a quick search on Twitter for "Bally Sports sucks" and there were hundreds of results from all over the country in just the last 24 hours or so.

It might be the worst streaming app ever created and that is saying something after the performance HBO Max put on for the better part of a year when they first launched.

Well it appears the reason they could never fix their bum ass app was because their bum ass business was barreling straight towards bankruptcy court. The wildest part is the fact the sports franchises were given the option to take an ownership stake in their regional network or be forced to have their deal restructured.

To state this as simply as possible, whatever Bally (Sinclair Broadcasting) promised they would pay your favorite team for the rights to air the games, well the team ain't getting it. And this could have some massive repercussions for owners who run their teams on a shoestring budget and rely on their TV money to make payroll. The first team it appears to be screwing over is the St. Louis Cardinals.

The St. Louis Cardinals had the highest local television broadcast ratings in 2022, but their sustained popularity could be the team's undoing after Diamond Sports Group cut its profitability projections, potentially leading to Bally Sports' extinction and a massive cut in team revenue.

The New York Post reported that Diamond Sports Group is struggling to find a buyer for its networks and may go to bankruptcy court next year, so the cable sports industry, long in decline because of the increase in "cord cutting," could accelerate its demise. MLB owners would feel the repercussions of losing television contracts, and the Cardinals are likely to be hit the hardest given the uniquely large chunk of revenue that comes from television viewership.

The slice in payroll would almost certainly lead the Cardinals to be more stringent in spending, and they might not pursue players they would have otherwise considered. Any necessary moves, such as the team's sorely needed upgrades to its 2024 starting rotation, might not be to the level fans expect.

So not only is Bally Sports fucking over your viewing experience but now they are fucking over the actual team on the field as well. Just swell. 

They will almost assuredly get this sorted out and Sinclair's creditors will take over equity in exchange for forgiving debt. But that also means that the broadcast deals with individual teams will need to be restructured under intense pressure to lower the amount being paid. 

To be clear, I could give a shit less if this hurts a Billionaire's pockets. Cry me a river from your beach house in Malibu where you meet your other botox faced friends and plot which industry to destroy next. But we all know that they are going to pass the bill on to the fans and that just sucks. Whether that means raising ticket prices or lowering payroll, the people this is really going to hurt is you and I.

In Cleveland, Larry and Paul Dolan own the Guardians and are already under immense pressure from fans to increase spending to try and win their first championship since 1948. I can tell you right now those penny pinching bastards aren't increasing shit if their TV revenue is decreasing. 

Sports - especially baseball - is full of owners who barely scrape by and deem it a necessity to turn a profit from their team. Which is certainly their right. And in turn it is the right of the fan base to want them to sell the team to someone who doesn't NEED to turn a profit. Which has garnered some interesting responses from the teams over the past few seasons…

And these were statements before both of these teams knew they were going to be negatively affected by the bankruptcy of Bally Sports. 

It all just sucks. As a fan you just want to turn on your TV and watch your favorite team. Unfortunately, now you have to worry about the business side of not only the organization, but also the piece of shit streaming service that is carrying them as well.