Diamond Sports Group LLC, the regional-sports broadcasting company, will face off today with Major League Baseball and four of its teams, which say that Diamond has been eating a “free lunch” in chapter 11 by broadcasting games without paying for the exclusive rights, WSJ Pro Bankruptcy reported. MLB and the clubs say that Diamond shouldn’t get to access its cash collateral in chapter 11 until it agrees to resume paying them for the rights to broadcast their games. The company hasn’t paid broadcast fees to the Texas Rangers, Arizona Diamondbacks, Cleveland Guardians and Minnesota Twins since entering chapter 11, court papers show. Diamond has argued it is being overcharged and should only have to pay the “reasonable value” of the broadcast rights it receives — not the original contract rate. Until the bankruptcy court determines the appropriate rate, Diamond says it shouldn’t have to make ongoing payments for those broadcast rights. The baseball clubs and MLB itself deny their contracts can be reformulated like that. Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston will consider Wednesday if Diamond must make its agreed-upon payments as a condition of continuing to broadcast games.
