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Bally Sports San Diego out as Padres broadcast partner; team, MLB will stream and broadcast games, lift local blackouts

Bob Scanlan interviews Manny Machado
Bob Scanlan interviews Manny Machado as the San Diego Padres played the Seattle Mariners on Friday, February 24, 2023 in Peoria.
(K.C. Alfred/The San Diego Union-Tribune)

Fans can stream games for free on MLB apps and at Padres.com starting Wednesday through the end of the weekend, with more broadcast partners lining up

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Tuesday marked Bally Sports San Diego’s last Padres broadcast.

Parent company Diamond Sports missed last week’s payment and let the grace period expire, triggering the return of broadcast rights to the Padres and Major League Baseball.

The Padres and MLB will now partner on a direct-to-consumer streaming option, an endeavor that includes the permanent lifting of local blackouts. Starting Wednesday through the end of the weekend, fans can stream Padres games for free on MLB’s apps, at MLB.com and Padres.com (pay subcriptions will be required after that).

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MLB has already secured deals with DirecTV, AT&T U-Verse, Cox, Spectrum and fuboTV to carry Padres games. The channel lineup was announced late Tuesday night. The Padres’ on-screen broadcast teams will remain in place as they are team employees.

“We have been preparing for this groundbreaking moment,” Padres Chief Executive Officer Erik Greupner said in a statement released to the Union-Tribune. “The Padres are excited to be the first team to partner with Major League Baseball to offer a direct-to-consumer streaming option through MLB.TV without blackouts while preserving our in-market distribution through cable and satellite television providers. Our fans will now have unprecedented access to Padres games through both digital and traditional platforms throughout San Diego and beyond.”

MLB had been positioning itself to take over broadcasts amid bankruptcy proceedings aimed at eliminating more than $8 billion in Diamond’s outstanding debt.

Diamond announced that it would not make its payment before Tuesday’s grace period expired, with a spokesperson providing the following statement:

“Diamond Sports Group (DSG) has decided not to provide additional funding to the San Diego RSN that would enable it to make the rights payment to the San Diego Padres during the grace period and will no longer be broadcasting Padres games after Tuesday, May 30. While DSG has significant liquidity and has been making rights payments to teams, the economics of the Padres’ contract were not aligned with market realities. MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights. We are continuing to broadcast games for teams under our contracts.”

Diamond made an 11th-hour payment on its 20-year, $1.2 billion contract with the Padres — roughly $60 million a year through 2032 — on the eve of opening day, although that deal had been highlighted as one that was especially troublesome for the company amid the cord-cutting era.

The New York Post reported in March that the Padres’ deal was costing Diamond $20 million a year.

Court filings in March had shown that Diamond’s regional sports networks had lost 22 million subscribers and $810 million in revenue over the last four years. The 22.6 percent decline was due in part to distributors like YouTube TV and Hulu+ Live TV dropping Bally Sports channels across the country.

Diamond owns the rights to stream games of five of their 14 MLB partners. Their desire to purchase the rest at fair value — including the Padres’ streaming rights — had been rebuffed by MLB, a significant hurdle in Diamond’s hopes to make up for lost revenue.

An MLB attorney argued in court in March that Diamond could not force teams to provide additional streaming rights, nor was it the league’s responsibility to fix a “broken model” that had once played a significant role in baseball’s growing economy.

Sinclair purchased Fox Sports Networks for $10.6 billion in 2019 and established Diamond Sports as its regional sports network branch. Diamond is looking to separate from Sinclair as a standalone company during bankruptcy. Those proceedings do not include the Padres’ deal because the team owns a 20 percent stake in Bally Sports San Diego (formerly Fox Sports San Diego) as agreed upon during the deal that was signed in 2012, when an ownership group spearheaded by Ron Fowler and Peter Seidler purchased the Padres.

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