Diamond Sports Group Bankruptcy Begins to Echo Across Baseball
The 2023 Major League Baseball season has been over for more than a week, but betting on baseball continues throughout the off-season. BetUS.com has the Atlanta Braves as the favorite to win the 2024 World Series, paying +700. The Minnesota Twins, who won the American League Central this year, is a good value bet at +2800.
But the Twins just announced that they will spend this off-season reducing their payroll for next season, leading one to question just how competitive they might be next year. The Twins received $54.8 million this past year from Bally Sports North. But that contract has expired, and Bally’s parent company, Diamond Sports Group, is in bankruptcy court.
Bally’s is in negotiations with several of the 12 teams that it had broadcast deals with in 2023, but no one is expecting that the money will be nearly as high as it was this past season. And some teams, like the Twins, are looking for alternatives.
But while the search for a TV partner takes place, the team has to go about the business of baseball and the constraints of a shrinking budget.
Twins Shaving up to $30 Million in Payroll
Starting pitcher Sonny Gray was one of the biggest reasons the Twins won their division, and he is one of four Cy Your award finalists in the American League.
Gray made $10 million last year, but the market this off-season is likely to offer him at least $20 million for 2024. The Twins now won’t be able to match that, nor will they be competitive in free agency in an attempt to replace Gray.
BetUS.com is taking bets on where Gray will play next season, and the St. Louis Cardinals are the favorite at even odds.
Max Kepler was an important part of the offense, but he’s now 32 and making $10 million in 2024. Jorge Polanco and Christian Vazquez are also over 30 and scheduled to make more than $10 million in 2024.
It’s not just a case of the Twins not being able to pursue the players that might put them over the top, but current players will have to be moved.
Last year was the Twins first division title since the COVID-shortened season of 2020, and the excitement of the second half of 2023 led to a surge in attendance at Twins games. They finished the season with their highest attendance since before the COVID shutdown at just under two million fans on the season.
Capitalizing on that momentum becomes significantly harder when those fans know that the team won’t be competing for top players this off-season.
Bally Sports Other Teams
Last season, the San Diego Padres and Arizona Diamondbacks were part of the Bally Sports family, but they were kicked out as part of Diamond’s bankruptcy restructure. MLB helped soften the blow, providing them with 80% of the money they couldn’t make through alternative broadcast deals. But those extra dollars won’t be there in 2024 for the Padres, Diamondbacks, or Twins.
MLB is preparing to help as many as 16 teams with their local television rights, and for big market Bally Sports teams like the Atlanta Braves and Los Angeles Angels, the dip in revenue shouldn’t be too significant. But for teams like the Kansas City Royals, Cincinnati Reds, Tampa Bay Rays, and Milwaukee Brewers, the lost money could be significant.
“It’s certainly daunting,” said Brewers general manager Matt Arnold. “We just have to make sure we, as an industry, are aligned with the best ways to generate revenue. It’s certainly a challenge in our industry, for sure, especially for the smallest market in the league.”
Major League Baseball says that the transition away from Regional Sports Networks and to streaming services will be better in the long run. But even commissioner Rob Manfred has conceded that in the short term, some teams will lose money.
However, the real fear sits three years away. If the television dollars continue to dry up, when the owners sit down with the players to begin negotiating the next collective bargaining agreement, teams may be forced to ask for a salary cap. And that, almost assuredly, will lead to a work stoppage.