New details emerge on Padres, Diamond Sports Group settlement

Minor developments in the long-running Diamond Sports Group bankruptcy proceedings occurred this week. Most notable is the revelation of a deal that the broadcasting conglomerate struck with the Padres last summer.

Daniel Kaplan of Awful Announcing first reported that Diamond agreed in July to a deal that could pay the San Diego organization as much as $78.9M to resolve breach of contract claims, which the Padres made after Diamond dropped the team’s TV deal last spring. The Padres initially sought a $162M award as compensation for the lapsed television contract before agreeing to the lesser sum in mediation.

That money has not yet been paid. The settlement calls for an initial payment of roughly $10.5M, followed by a second payout worth a maximum of $68.3M, determined by calculating the remaining assets of that contract’s value after the Diamond/Padres RSN network is officially liquidated. Jeff Sanders of the San Diego Union-Tribune writes that Diamond will owe the approximate $10.5M payment by the middle of May. The timeline for the second, much larger sum is still not clear.

As part of the agreement, the Padres and Diamond agreed to drop all litigation against one another. The Friars have proceeded without an RSN deal since Diamond abandoned the contract. MLB has handled in-market broadcasting in San Diego via MLB.tv. The league covered 80% of what the Padres would’ve received — Sanders writes that the deal was valued around $60M annually — for the 2023 season. Commissioner Rob Manfred said the league would not cover lost rights fees for this year and beyond.

The Padres are one of two teams Diamond had covered but abandoned midseason. A few weeks after dropping the San Diego deal, the company did the same with the Diamondbacks. It is unknown if Diamond has agreed to any kind of settlement with the Arizona franchise.

Diamond continues to hold local broadcasting rights for 12 teams: the Angels, Braves, Brewers, Cardinals, Guardians, Marlins, Rangers, Rays, Reds, Royals, Tigers and Twins. While it initially seemed that Diamond would disband after the 2024 season, an influx of cash as part of a streaming partnership with Amazon has given the company confidence about its viability beyond this year. That’s not entirely shared by MLB, which continues to express skepticism about Diamond’s long-term prospects. The Atheltic’s Evan Drellich writes that the bankruptcy court has scheduled a hearing for June 18 on the company’s specific plans for its $450M in financing from the Amazon deal.