The Office of the Commissioner of Major League Baseball and four major league baseball clubs won a ruling to compel Diamond Sports Group’s regional sports networks to pay the full fees due under their telecast rights agreements with the four teams. Diamond Sports and its networks, which filed for Chapter 11 in March, had argued that the fees for telecast rights should be reduced because the market for traditional broadcast rights has drastically changed.
On June 2, after a two-day hearing which included testimony from MLB Commissioner Rob Manfred, U.S. Bankruptcy Court Judge Christopher Lopez in the Southern District of Texas ruled in MLB’s favor. Although market conditions had changed since the telecast rights were negotiated at various dates between eight and 13 years ago, these contracts were not “clearly unreasonable,” he stated from the bench. Even in an era of widespread “cord-cutting,” he could not overlook Manfred’s testimony that MLB had offered in January to reacquire all of the MLB team telecast rights from Diamond Sports networks and assume the associated fee obligations, plus provide additional consideration to Diamond.
MLB contended that Diamond Sports and its networks were attempting to withhold full payment of the telecast rights fees to the four clubs in order to “blackmail” MLB into allowing it to acquire for no additional consideration direct-to-consumer, or DTC, streaming rights for eight teams, including the four in this litigation. The four teams are the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers.
The S&C team representing the Office of the Commissioner, as well as the Minnesota Twins, included Jim Bromley, Benjamin Walker, Alexa Kranzley, Bill Wagener, Akash Toprani, Thomas McIver, David Rosenthal, Rachel Rolnick, Amy Taylor, Joshua Hardin and Nam Luu.
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