“You can’t tell the players without a scorecard!”
Back in the 1980s, when Bostonians could watch 100 or so Red Sox games for free every year on WSBK with Will McDonough’s kid calling the action, the wizened hawkers outside Fenway would holler the phrase to drive program sales—and actually aid fans of the ball club, which has never put player names on the back of the home jerseys.
Those days are gone forever. Sean McDonough calls hockey games for Disney, NESN’s direct-to-consumer product costs $329.99 per season, and WSBK’s programming day is now devoted entirely to infomercials, syndicated judge shows and repeats of Chuck Lorre comedies. Yet the scorecard catch phrase still applies, at least when figuring out who’s who in the RSN space in the wake of Diamond Sports Group’s Chapter 11 filing.
Sox fans don’t have to worry about the ramifications of the Diamond bankruptcy—NESN is an indie RSN controlled by John Henry’s Fenway Sports Group. But baseball enthusiasts in 14 other markets are keeping an eye on the proceedings as Opening Day approaches. While it’s unlikely that this season’s broadcasts will be disrupted (more on that in a bit), we’re now in the early innings of a comprehensive overhaul of the RSN model.
To that end, here’s a primer on some of the players in what is expected to be a drawn-out battle to keep baseball’s local-TV pipeline up and running.
Diamond Sports Group
In a statement issued Tuesday evening, Diamond CEO David Preschlack characterized the bankruptcy process as a means to “reset our capital structure and strengthen our balance sheet through the elimination of approximately $8 billion of debt.” More to the point, Preschlack assured fans of teams such as the Detroit Tigers, St. Louis Cardinals and Los Angeles Angels that “DSG will continue broadcasting games and connecting fans across the country with the sports and teams they love.”
In other words, Diamond will continue to operate, at least in the near term. In an 83-page summary released Wednesday morning, DSG projects that it will close out the year with a cash balance of $462.9 million. Preschlack, who previously oversaw the NBC Sports RSNs after putting in 20 years at Disney/ESPN (affiliate sales/distribution), was named CEO of DSG in December 2022. (At the time of Preschlack’s official hiring notice, he had already been sitting on the DSG board for seven months.)
Preschlack was brought in to smooth over much of the animosity that had arisen between Sinclair Broadcasting and the RSNs’ league partners, and the relationship with Major League Baseball has required special care. (Baseball represents DSG’s biggest investment; of the $1.917 billion in franchise payments the company is on the hook for in 2023, roughly 55% of that sum gets handed over to the 14 MLB clubs on the Bally Sports roster.)
Preschlack is also expected to continue to serve as the top boss after DSG exits the Chapter 11 proceedings; as such, he intends to keep the money flowing to the affiliated MLB teams. While there have been indications that DSG may not make good on its agreement with the Arizona Diamondbacks, which are encumbered by the double whammy of high fees and low TV ratings, the 30-day grace period for that payment doesn’t expire until Thursday night. (Also waiting for their checks are the Reds, Padres and Guardians, although it is believed that DSG has until the end of the month to square up with those clubs.)
Preschlack will see to it that the payments go out, however delayed or reduced they may be, because his job is to ensure that DSG remains a viable business. If and when the terms of an agreement are unsatisfied, MLB will look to snap up the rights for that particular team—but at this juncture, none of the 14 clubs are at risk for an Opening Day blackout.
As chairman of the group, former Fox Sports exec and Hulu CEO Randy Freer is not only a known property within the DSG family—one insider estimates that 60% of those employed at Diamond worked for Freer during his previous media stints—but he also has a working relationship with everyone who is anyone in the world of sports media. Simply put, Freer gets things done, and it’s expected he’ll continue to pull the strings as DSG works to safeguard its future.
Given the exhaustive nature of bankruptcy court, the DSG endgame is far from certain. On the other side of the restructuring, Freer & Co. may look to sell off a couple of the sports nets, while shoring up its partnership with the leagues by offering up a minor, but not insignificant, share in the business—say, 5% to 10%. However such a deal is structured, it is imperative the major players all come together to help salvage the RSNs, as the survival of all those concerned depends upon a vigorous distribution model. That’s “distribution” as in good ol’ pay-TV; if the fate of DSG and its league partners is contingent on a robust direct-to-consumer platform, they may as well cut their losses now rather than pinning all their shared hopes on a service that never reaches critical mass.
With Preschlack and Freer at the helm, it’s unlikely that fans will be sidelined during the upcoming MLB season. Will there be significant changes afoot in 2024 and beyond? Undoubtedly. But no matter who controls the RSNs in the aftermath of Chapter 11, the games are still almost assuredly going to remain on pay-TV for the foreseeable future, although streaming options should begin to mature. With penetration of the traditional cable bundle now at just 50% of all U.S. TV homes, the cord-cutting conundrum has reached critical mass, and there’s no getting the cork back into the bat after the barrel’s been shattered. But for this season, the one that’s set to kick off in just 15 days? Play ball.
MLB
In hiring Billy Chambers earlier this year—his official start date was Feb. 1—MLB all but issued a declaration of war on the legacy RSN model. Chambers is the ultimate insider, having served as CFO and COO of the Fox Sports-branded RSNs during Sinclair’s acquisition of those assets from Disney. Chambers not only pitched in on the sales process, he also oversaw everything from finance to legal affairs to business development. It’s possible no one on the planet knows more about the inner workings of the RSN business than Chambers, who’d previously put in 20 years at Fox Sports Media Group.
Chambers’ role with MLB is to look around corners, to figure out which way the winds of distribution are going to blow—and what steps to take if those gusts send the entire RSN model crashing to the ground. As exec VP of local media, he’ll work with MLB chief revenue officer Noah Garden to put the league in a position to wrest control of its local rights from the third-party operators.
Chambers has been tasked with realizing MLB’s ambitions to take a more hands-on role in how the games get distributed. In doing so, he’ll look to eliminate exasperating local blackout rules while developing an in-house direct-to-consumer product. In the early going, baseball may be frustrated in attempts to seize distribution from the battle-scarred RSNs, but in the long run, a reclamation of those local-media rights is one of its top priorities. Chambers’ hiring doesn’t indicate that the particulars of fandom are going to change overnight, but it’s a sure sign that MLB has recognized an existential threat, and must therefore be prepared to assume oversight of its games before another 10 million households cut ties with their local RSNs.
The Chapter 11 proceedings could very well drag out, but as the RSN story continues to evolve, you’re going to be seeing these three names pop up like so many Whac-A-Mole critters. The decisions these execs make over the course of this pivotal season will impact that way you watch live sports for decades to come.
