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Cardinals will keep Diamond Sports as its TV home and grant streaming rights

Vaseline November 9, 2024

The St. Louis Cardinals, one of the most prominent franchises in Diamond Sports Group’s broadcast portfolio, plan to continue to be televised by the company under a renegotiated multi-year deal.

The Cardinals will take a pay cut of about 25 percent in 2025 from what their previous deal called for, but their games will be available new to the market via a direct-to-consumer streaming product, allowing more fans to watch. The Cardinals’ station was recently rebranded as FanDuel Sports Network Midwest, from Bally Sports Midwest.

“We have a lot of fans who would love to have our games but can’t,” Cardinals President Bill DeWitt III said. “Now a direct-to-consumer product really helps us with our distribution and our reach.”

The timing of the renegotiated deal was no surprise. MLB had a 5 p.m. ET deadline Thursday to file appeals in Diamond’s long-running federal bankruptcy case. MLB has said in court that it plans to object to Diamond’s plan to contest, but the sides have also been negotiating the television fates of several teams ahead of a major hearing on Nov. 14.

Those conversations continue. On Thursday, MLB and Diamond agreed to extend the league’s appeal deadline for the second time this week, to Friday at 3pm ET.

For now at least, three teams are publicly expected to return to Diamond: the Atlanta Braves, Miami Marlins and now the Cardinals. But it’s not yet clear what will happen to five others: the Cincinnati Reds, Detroit Tigers, Kansas City Royals, Los Angeles Angels and Tampa Bay Rays.

The exact length of the Cardinals’ new deal with Diamond was not disclosed, but a person briefed on the arrangement said The Athletics it does not extend beyond this decade and offers “optional opportunities” as the sports media landscape changes.

That means if MLB tries to launch a national streaming package into the marketplace in the coming years — an ambition commissioner Rob Manfred has outlined — the deal appears to be short enough that the Cardinals could consider joining that setup without much delay . MLB’s national TV deals with ESPN, FOX and Turner run through 2028.

As for the Cardinals’ previous TV deal — a 15-year contract that ran through 2032 and was reportedly worth more than $1 billion — the team expected to earn about $75 million in rights fees by 2025. They’ll lose about a quarter of that amount, but the Cards are co-owners of the network and their revenues may vary slightly depending on factors such as sponsor inventory.

“The deals have elements that make them a little more complex than just saying, ‘Oh, there was a 25 percent haircut,’” DeWitt said.

The Cardinals opted to stay with Diamond rather than join the league’s in-house production group, which plans to produce and distribute broadcasts of at least six teams this season, a figure that could come in the coming week grow, depending on ongoing negotiations between Diamond and MLB. .

“That’s really what it came down to,” DeWitt said of the choice. “There were some low-probability alternative options, but we didn’t explore them very far.”

Sticking with the old model offers more cash flow certainty, so to speak, compared to the league’s broadcast setup, which doesn’t promise a set amount of money to teams.

“That’s partly the story, but we also feel like, at least for an interim period – and who knows, maybe for a long period of time – we have something to keep here with FanDuel Sports Network Midwest,” DeWitt said.

DeWitt saw the power in a network shared with the St. Louis Blues hockey team, which offers games year-round.

“There’s pretty good brand recognition here in St. Louis, and the broader market that we serve and that the Blues serve, and there’s a fan pattern to be found in the linear cable side,” he said. “The Blues already have a direct-to-consumer app, so there has been some history of that coming to market in recent years. And we feel like that combination might be good for everyone to market St. Louis sports on one channel.

The Cardinals had not previously granted Diamond streaming rights, but the team will now be available on the newly named FanDuel Sports Network app. That means fans in Cardinals territory can now subscribe to games without having to sign up for a full cable or satellite package. Those who subscribe to these services can also stream the games by verifying their pay TV credentials.

Pricing for the streaming plans was not announced Thursday.

The deal is notable because historically, most MLB teams and Diamond have rarely seen eye-to-eye on the value of streaming rights.

“We’ve been thinking about bringing a D-to-C product to market for our fans for a few years, but the Diamond situation made it very complex,” DeWitt said. “For example, if we had made a deal with them last year to make a D-to-C product as part of our original agreement, those rights could have been caught up in the bankruptcy process. And so they were just put on ice. And now that things are resetting a little bit, there’s a new deal, we can activate that product for our fans.

“And we’re very happy about that, because many of our fans in St. Louis and the surrounding areas are particularly extreme examples of this. Many of our fans haven’t had access to our games for a while, in some cases a few years, for one of two reasons: Either they’ve cut the cord on basic cable and the bundle, and they no longer get… FanDuel Sports Midwest, or they are still subscribed to the bundle, but their provider has dropped the network, like Dish for example.”

The Cardinals are now part of a group of more than a third of the 30 teams in the MLB that have likely cut TV rights payrolls over the past two years, amid cord-cutting and Diamond’s woes.

Diamond Sports Group hopes a federal judge will confirm its plan to emerge from bankruptcy next week during a hearing that starts Nov. 14 and could extend into Nov. 15.

“We are excited about deepening our relationship with the Cardinals and expanding our reach by delivering games to fans on a DTC basis,” Diamond CEO David Preschlack said in a news release Thursday. “As we move forward from bankruptcy, we remain committed to providing fans in the Midwest region with high-quality broadcasts through our linear and digital offerings and meeting fans where they are in the evolving viewership model. We continue to engage with our other MLB team partners on future plans, and we are confident that our linear and digital framework will generate maximum value.”

On Tuesday, objections had to be raised from other parties in Diamond’s bankruptcy case. Three were filed, including one from the US Trustee, the arm of the US Department of Justice that oversees bankruptcy cases.

The US Trustee argues that Diamond is asking for releases that are too broad, following a precedent set by the US Supreme Court in the bankruptcy of Purdue Pharma, the pharmaceutical company that manufactured the prescription painkiller OxyContin.

The Cardinals’ RSN is not formally part of the bankruptcy process because it is a joint venture station, owned by both the team and Diamond. But the Cardinals and other teams whose RSNs are operated as joint ventures are nevertheless functionally involved in the proceedings.

Diamond, which also carries a number of NBA and NHL teams, said in court last month that it planned to drop all but one of the eight MLB teams it still had under contract — joint venture or otherwise — unless these deals were renegotiated. The only deal Diamond didn’t seem willing to reconsider was with the Braves.

“I think it was probably a shock to some people that the bankruptcy hearing showed that they were willing to basically drop everyone except the Braves if they couldn’t reset the economy,” DeWitt said. “And that wasn’t really a surprise to us because we’ve been seeing this slow-moving train wreck for a long time, probably a few years.

“I think the timing of Diamond’s economic demise parallels our realization that we would eventually have to deal with this problem at some point. And this is the year for us that it happens.”