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Bally Sports Possibly Declaring Bankruptcy


MVP2110
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4 minutes ago, Brock Beauchamp said:

In the long run, it's a good thing for the sport if Bally fails miserably.

The NBA, NHL, and MLB should buy up the RSNs. They should have done it when Fox sold.

If they don't want to do that, sell to a new media company like Amazon or Apple and let them dismantle the entire system.

Long term it is probably good. Short term I think this could drastically hurt the Brewers payroll as well as the Bucks for fans who care about them. Losing out on this money is a big deal for these teams 

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Just now, MVP2110 said:

Long term it is probably good. Short term I think this could drastically hurt the Brewers payroll as well as the Bucks for fans who care about them. Losing out on this money is a big deal for these teams 

Oh, for sure. If this really goes down, the short-term could be quite ugly for a bunch of franchises across three sports.

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Long term it might be good for people trying to watch the brewers but I think it would guarantee lower payroll for a long time. Since they apparently over paid for TV contracts. 

I tried to log in on my iPad. Turns out it was an etch-a-sketch and I don't own an iPad. Also, I'm out of vodka.
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I think there's a good chance MLB steps in, as Manfred has made some recent comments alluding to a desire to get rid of blackouts. It's hard to blow the system up when many teams are still printing money from their RSNs, but maybe this is enough of a critical mass to get some change. 

Signing a new exclusive deal with a streaming service like Amazon doesn't excite me at all, that model doesn't necessarily appear to be sustainable either. The model needs to be largely ad-supported. Put the games on MLB.tv with no blackouts and sell the non-exclusive rights to simulcast for cheap. Take the short-term revenue hit in exchange for the long-term growth of the product. 

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We are about to tank the payroll way farther than the value of our TV deal after 2023 anyway....so I don't know that short term is really that big of a deal. This is arguably the perfect time for this to happen. 

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21 minutes ago, MVP2110 said:

What's interesting is the Brewers took a minority ownership stake when they signed their new deal in 2021

https://www.bizjournals.com/milwaukee/news/2021/05/07/brewers-take-minority-ownership-stake-bally-sports.html

If that article is correct, the Brewers are getting $34 million/year for their TV rights, up from $28 million under the previous contract. 

Presumably they took an ownership stake in as part of negotiating that $34 million/year number. The RSN model has been screwing the Brewers for decades. The sooner it dies, the better. 

Another interesting tidbit from a different article...

Quote

 

Major League Baseball has hired Billy Chambers to the newly created position of Executive Vice President, Local Media, and promoted Kenny Gersh to Executive Vice President, Media and Business Development, it was announced today.  Both executives will report to MLB’s Chief Revenue Officer Noah Garden. 

Chambers will start on February 1, 2023, overseeing MLB’s management and distribution of local media rights.  He will work closely with the 30 Clubs on the most effective means to distribute games to fans in local markets throughout the country.  Chambers possesses more than 20 years of senior financial leadership experience in television sports including with Sinclair Broadcasting and FOX Sports Media Group.

 

 

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Probably doesn’t mean anything. Companies declare bankruptcy all the time, investors and debtors come and go and the company emerges with new leadership in the same business. 
 

Sinclair is the parent company; they’re not going anywhere, the probably will start a new subsidiary company for broadcasting  and shirk all Bally’s old debts in the process.
 

 

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20 hours ago, Jopal78 said:

Probably doesn’t mean anything. Companies declare bankruptcy all the time, investors and debtors come and go and the company emerges with new leadership in the same business. 
 

Sinclair is the parent company; they’re not going anywhere, the probably will start a new subsidiary company for broadcasting  and shirk all Bally’s old debts in the process.
 

 

Maybe but I think Sinclair would prefer to sell off Bally's than incur more loses.  It also depends on what type of bankruptcy they are filing.

If Sinclair does shirk all of Bally's old debts that means the teams do not get paid or will only get paid a fraction of what they are owed which will paid out to all of the broadcasts with the larger market teams getting more back the smaller market teams.  So the Angels, Heat, Braves and others will get more compared to what the Brewers will get.  Then depending on the order of the debt holders the teams could get even less if they are on the lower end of the debt pecking order. 

So this is a really big deal for the small market teams like the Brewers.  I think Sinclair (Bally's) just offers the teams higher ownership shares in the TV deals for a lower payout.  The Brewers probably go from 30% to 40-60% ownership and only a $10-20m a year payout. 

 

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24 minutes ago, nate82 said:

Maybe but I think Sinclair would prefer to sell off Bally's than incur more loses.  It also depends on what type of bankruptcy they are filing.

If Sinclair does shirk all of Bally's old debts that means the teams do not get paid or will only get paid a fraction of what they are owed which will paid out to all of the broadcasts with the larger market teams getting more back the smaller market teams.  So the Angels, Heat, Braves and others will get more compared to what the Brewers will get.  Then depending on the order of the debt holders the teams could get even less if they are on the lower end of the debt pecking order. 

So this is a really big deal for the small market teams like the Brewers.  I think Sinclair (Bally's) just offers the teams higher ownership shares in the TV deals for a lower payout.  The Brewers probably go from 30% to 40-60% ownership and only a $10-20m a year payout. 

 

The Brewers are getting screwed by RSNs more than any other team in MLB (excluding ones that don't care about winning games). If they lose a fraction of their revenue, it will be the same fraction lost as every other team caught up in this. 

The best case scenario for the Brewers is for there to be no path forward with an RSN -- that is, the payout is so low that the Brewers would be better off going with a streaming service (as Brock suggested) or having a crisis that requires MLB intervention. Think about it from the perspective of the league as a whole. When revenue inflates, we fall farther behind. We want revenue to contract. 

The only concern from the fans perspective should be the number of households that have access to Brewers games. 

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17 hours ago, nate82 said:

Maybe but I think Sinclair would prefer to sell off Bally's than incur more loses.  It also depends on what type of bankruptcy they are filing.

If Sinclair does shirk all of Bally's old debts that means the teams do not get paid or will only get paid a fraction of what they are owed which will paid out to all of the broadcasts with the larger market teams getting more back the smaller market teams.  So the Angels, Heat, Braves and others will get more compared to what the Brewers will get.  Then depending on the order of the debt holders the teams could get even less if they are on the lower end of the debt pecking order. 

So this is a really big deal for the small market teams like the Brewers.  I think Sinclair (Bally's) just offers the teams higher ownership shares in the TV deals for a lower payout.  The Brewers probably go from 30% to 40-60% ownership and only a $10-20m a year payout. 

 

Maybe, maybe not. Somebody is going to broadcast the games and the ad prices are not going to go down, so the revenue is there. Maybe the Brewers gain ownership interest in whatever company broadcasts their games, if so they’re one step closer to having their own tv network which is where the sport is going anyways. 
 

I just don’t see how the company who has the rights to broadcast the games can do so, paying less than they promised when ad revenue is constant. Reorganization, sure. Trading debt for ownership in the company, sure. Stiffing MLB teams… no. MLB undoubtedly has a room full of $1000/hour lawyers just waiting to limber up for that fight. 

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4 minutes ago, Jopal78 said:

I just don’t see how the company who has the rights to broadcast the games can do so, paying less than they promised when ad revenue is constant. Reorganization, sure. Trading debt for ownership in the company, sure. Stiffing MLB teams… no. MLB undoubtedly has a room full of $1000/hour lawyers just waiting to limber up for that fight. 

This is how the rich stay rich. File for bankruptcy to clear debts and/or get government bailouts with little repercussions in the grand scheme. Usually have plenty of other businesses/ventures completely protected from the other asset imploding. 

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1 hour ago, Jopal78 said:

 

I just don’t see how the company who has the rights to broadcast the games can do so, paying less than they promised when ad revenue is constant. Reorganization, sure. Trading debt for ownership in the company, sure. Stiffing MLB teams… no. MLB undoubtedly has a room full of $1000/hour lawyers just waiting to limber up for that fight. 

Ad revenue maybe constant but that doesn't mean it will be equal to what the payments to the teams are.  So a restructure will have to happen which means it is possible the teams don't get the full amount or they get the full amount but it will be in future payments. 

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17 minutes ago, nate82 said:

Ad revenue maybe constant but that doesn't mean it will be equal to what the payments to the teams are.  So a restructure will have to happen which means it is possible the teams don't get the full amount or they get the full amount but it will be in future payments. 

That's the point, if Bally files for bankruptcy I don't think the Trustee would allow them to broadcast the games, collect the ever increasing ad revenue, then pay the MLB teams they are partnered with less than the bargained for amounts, unless of course the teams consent (ie. we'll take less money in exchange for a larger ownership interest in the TV network). 

Frankly, if Bally hasn't paid what they owe under the broadcast contracts, the bankruptcy trustee could simply sell the broadcast rights in the contract to a new company, and use the proceeds of the sale to payback what is owed by Bally, and the universe keeps on trucking as if nothing ever happened.  

Also, don't forget road teams are not playing for free either. Every MLB team  contributes a portion of their local broadcast revenue to a general MLB fund which then splits it up and distributes a share to each team. So the Brewers or Royals hypothetically getting stiffed also effects the Dodgers and Yankees, which makes it very likely that any Bally bankruptcy is much ado about nothing other than some corporate balance sheet shenanigans. 

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So based on this, is this a correct statement:

Less than one month from the start of spring training games (some of which will be televised) and a little over two months from opening day, some teams don't have anyone to televise their games?

I can't tell if that's the case or not but if it is, what a cluster...

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I think they knew the economics were bad when FSWI rebranded to Bally, but there was hope for sports betting revenue to make up the difference. That seems to not have happened for whatever reason. Bally was just more of the same. 

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15 minutes ago, owbc said:

I think they knew the economics were bad when FSWI rebranded to Bally, but there was hope for sports betting revenue to make up the difference. That seems to not have happened for whatever reason. Bally was just more of the same. 

I believe FanDuel, DraftKings and others are far more popular than Bally's with sports betting at least the apps are far more popular than Bally's. 

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Bally grossly overpaid for the RSNs at a time when most people were cutting the cord.  Then they overpriced them so much to cause all the streaming services that carried the channels to drop them, so they could introduce their own streaming service for $20/month, which doesn't seem to be going too well for them.

The RSN model is dying, and Bally Sports going under would speed that up.  The RSN model going away would help small market teams with a league wide TV deal as well as fans being able to see the games without the dumb blackout rules.

Hey MLB, if you just give me access to Brewers games on MLB.TV I'd happily fork over the money every year to see all games.  This shouldn't be that difficult.

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