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Court proceedings can be bland, drawn-out affairs.
This week's showdown in bankruptcy court between Diamond Sports and Major League Baseball — with the Twins among the affected teams — was thankfully neither of those things.
It had an acrimonious liveliness to it, shaped mostly by sharp testimony from MLB Commissioner Rob Manfred. And proceedings that began Wednesday wrapped up with a ruling Thursday — one in favor of MLB, perhaps setting in motion a chain of events that could change how you watch the Twins this season.
The Star Tribune's Phil Miller described himself as the lone sportswriter in the courtroom Wednesday amid dozens of lawyers. He shared some of his insights and observations on Friday's Daily Delivery podcast.
After following both the leadup to the proceedings and processing what happened this week, here are the five most interesting things to me:
How much Diamond Sports is paying the Twins
Perhaps the best thing about courtroom affairs is that concrete information laid bare on the record. Facts are the bedrock of testimony, and we learned a lot of things this week. The most revealing, to me, was that the Twins are being paid $54.8 million this season by Diamond Sports to have their games shown on Bally Sports North.
Previously sourced reporting had estimated the number as "more than $40 million," but the actual figure is quite a bit more than $40 million. It shows the amount of money at stake, particularly if Diamond Sports walks away from the contract in the coming weeks.
How much MLB would pay to takeover broadcasts
That said, we also learned that Major League Baseball will cover 80% of that contract in the event that Diamond Sports does bail on the deal. So while that would cost the Twins about $11 million, it wouldn't be catastrophic to their bottom line.
And any lost revenue could be at least partly offset by the less tangible but still important increase in good will that would come from MLB taking over production and distribution of games — a move that would make Twins games accessible to a much larger audience via a standalone direct-to-consumer streaming option that isn't currently available.
What's less known is how the financial model works in the long run in an MLB-controlled system, but MLB was the runner-up in bidding to purchase the regional sports networks in 2019 and clearly has a plan to realize value from showing games.
What's the real value of the contract with the Twins?
Some of that value might have been revealed in a set of rather comical facts that undercut Diamond's entire argument that the value of the contract with the Twins and other teams is less than what was agreed upon when the contracts were signed.
Of note: Diamond projects that it could sell 10 million direct-to-consumer subscriptions by 2028. Those Bally Sports Plus subscriptions currently sell for $190 a year and provide access to NHL and NBA teams in Bally markets but only five MLB teams (none of which are the Twins). At that price point, they would bring in nearly $2 billion in annual revenue for Diamond five years from now. So it's not surprising that MLB won't just give away those digital rights for free.
Further undercutting Diamond's claim of reduced contract value: Twins President Dave St. Peter testified that Diamond offered the Twins $54 million a year to show games in 2024 as part of a proposed five-year contract extension. If the current contract calls for $54.8 million, it's hard to claim it isn't fair and then offer almost the identical contract for the following year.
What does this all mean for viewers?
OK, but what does this all mean for viewers? We still don't know that. Diamond could decide to make the rest of the payments to the Twins this year before their 12-year contract expires at the end of the season in hopes that keeping that relationship alive might have future benefits.
But with just four months left in the contract and another large payment due July 1, it's entirely possible this ruling means Diamond walks away from the Twins and MLB takes over production of games — showing them in much the same way over cable and satellite as they currently are on Bally Sports North, with an added streaming option for non-subscribers at a monthly fee. Indeed, Miller's prediction is that this happens by July 1, which would be right in the middle of the season.
The play-by-play and analyst team would remain the same because those are Twins employees, but the pregame and postgame — currently Bally employees — would either be a completely different crew or the shows would be eliminated entirely.
Bad financing opened the door for MLB
All of this might have been avoided had Diamond and parent group Sinclair not financed the deal to buy 19 regional sports networks in 2019 with so much debt. The regional sports model isn't necessarily broken, but the deal was over-leveraged and started a downward spiral.
That spiral quite possibly led Diamond into some desperate negotiating tactics that MLB didn't like, and the deterioration of that relationship — spelled out in Manfred's biting testimony that included the assertion that MLB heard "a lot of complaints from clubs" about Diamond — seems to have led us, at least in part, to this point.
If MLB's goal is to control as many broadcast rights as it can get its hands on, either through these bankruptcy proceedings or the natural expiration of contracts, their motivation clearly lies in two areas: The self-interest of a streamlined product, increased exposure and revenue potential along with what seems to be an animosity toward one of the main players in the distribution of their games.
