Diamond Sports Group Ordered to Pay Full Contracts for Rangers, Twins, More MLB Teams

United States Bankruptcy Judge Christopher M. Lopez ruled Thursday that Diamond Sports Group, which operates Bally Sports and filed for Chapter 11 bankruptcy in March, must pay the Minnesota Twins, Arizona Diamondbacks, Cleveland Guardians and Texas Rangers the entire value of their existing media contracts.

Daniel Kaplan and Evan Drellich of The Athletic were among those who relayed the news.

Diamond Sports Group operates Bally Sports, a series of regional sports channels. The organization filed for Chapter 11 bankruptcy after it failed to make a $140 million interest payment. Per Joe Reedy of the Associated Press, the Bally Sports networks had rights to 14 MLB teams, 16 NBA teams and 12 NHL teams (42 total).

On April 6, Major League Baseball, the Guardians and the Twins filed an emergency motion to force Diamond Sports Group to pay rights fees or release rights to the league so it could broadcast games, per Maury Brown of Forbes.

Diamond Sports notably missed payments to the Twins, Diamondbacks, Rangers, Guardians and Cincinnati Reds. Brad Adgate of Forbes relayed their case.

"Diamond Sports has recognized they have defaulted on their payments to MLB teams. They argue bankruptcy laws enable them to restructure their financial agreements based on the valuation of the current market. The continued prevalence of cord cutting has had an impact on its revenue. RSNs command among the highest subscriber fees in the cable TV industry."

Per The Athletic, Judge Lopez ruled on April 19 that Diamond Sports had to pay 50 percent of what the Diamondbacks, Guardians, Twins and Rangers were owed in the interim before ruling on the motions Thursday.

Joe Nelson of Bring Me the News relayed some of Lopez's remarks.

"Maybe market forces change terms of deals. But market risk is always there, inherent in every contract," Lopez said regarding DSG's argument that cord cutting altered the market to the point where it felt that it could pay the market rate dictated by bankruptcy law (h/t The Athletic).

"Knowing that I think the contract rate is the reasonable and the right rate, the way that teams are locked in, the evidence that's presented before me, I'm going to find that the fees are the actual necessary cost of preserving the state. The teams can keep the 75 percent I believe they've already received and they should get the [remaining] 25 percent."

Per The Athletic, DSG has a choice: either keep the contracts or reject them as it did with the San Diego Padres. As noted by ESPN's Alden Gonzalez, MLB will now air the team's games via the league streaming service and different cable networks.