What the future could hold for Bally Sports as bankruptcy news emerges

If you're hoping for any explanation of what's going on with Bally Sports, don't.

It's one big, complicated issue involving debt, sports rights, and media development.

There is little doubt that the holding firm Diamond Sports Group, which owns and runs the regional sports networks Bally Sports via Sinclair Broadcasting, is heavily indebted.

Also Read: Ballysports.com Activate

When Sinclair first dipped its toes into the sports market, the argument was that those sports networks, which were acquired from the Walt Disney Co.

so that the latter could finish acquiring 21st Century Fox, were an exorbitant luxury vehicle that was all show and no substance.

Cleveland Guardians Streaming News:

On Peacock, the Guardians will have two games that are nationally televised.

That assessment is now proving to be accurate in the wake of the epidemic and the acceleration of cord cutting, and Bally's still makes the majority of its revenue from per-viewer carriage fees. 

According to estimates, when Disney tried to sell the networks, it was unable to acquire its desired price of $20 billion and had to settle for the pitiful sum of $10.6 billion.

According to a Bloomberg article, Diamond is currently looking to restructure its $8.6 billion debt in the aim of becoming a better business. However, Diamond presently owes $55 billion in sports rights for agreements with NBA, MLB, and NHL franchises spread across 19 properties. 

For professional sports clubs including the Reds, Guardians, Cavs, and Blue Jackets in the local area, the sports rights are held by Bally Sports Great Lakes and Bally Sports Ohio, respectively.

What could happen if Bally Sports goes bankrupt?

Diamond is weighing its options, with bankruptcy ranking as the least desirable. If that does place, it might cut off those teams' main local source of income. 

There are numerous possible outcomes for this, including the teams receiving their original rights back or the leagues acquiring an interest in any broadcasting company. That's a notion that has been put forth previously.

Cord cutting clogs Bally Sports revenue stream

Just the broadcast portion of this is being discussed.

The root cause of Bally Sports' predicament is cord cutting, a trend that began as a means of empowering consumers but is steadily changing into something else.

Live TV providers once offered cable TV systems an affordable alternative (think YouTube TV and Hulu with Live TV).

People loved having most of what cable offered, especially regional sports networks, while saving a few dollars. Until those services stopped offering sports. Bally Sports eventually parted ways with YouTube TV and Hulu.

Hulu had 3.3 million customers at the time whereas YTTV had over 3 million. Since YTTV currently has more than 5 million users and Hulu claims 4 million, they have expanded without the "benefit" of having regional sports networks.

It helps that Fubo TV just declared it was returning to regional sports after a three-year absence. It brought with it a hefty price increase for its estimated 1.23 million consumers.

This is a deliberate risk. Fubo's subscriber base will undoubtedly grow to include some sports lovers, but given the price hike, it should be worried about possible losses.

Sports fans typically complain the loudest about carriage problems, but when it comes to watching, they are a minority - unless it's the NFL.

According to research from the marketing research company Wizer, 21.6% of pay TV subscribers usually watch ESPN. Thus, approximately 80% of people are uninterested in what some people humorously call to as "sportsball."

Despite this recent increase, Bally's is currently drowning in debt because to the gradual decline in audience. What will that mean for Cavs and Guardians fans?

What are the possible repercussions of Bally Sports Detroit’s financial problems for Detroit Pistons games

• Less on-air talent is present in the Pistons broadcasts, which include play-by-play announcer George Blaha, colour commentator Gregory Kelser, at least one sideline reporter, and a variety of hosts and analysts on halftime, pre-game, and post-game shows. They are paid; they are not volunteers, and cutting costs by hiring fewer employees might be something Diamond considers.

The only reporters left on several NBC regional networks are the play-by-play announcer and the commentator. Additionally, they have fired on-air personnel by not renewing their contracts.

It eventually creates a large number of apertures. Don't worry too much about Blaha losing his job because, typically, the play-by-play announcer is protected because they serve as the station's public face.

But if on-air talent is asked to accept a pay cut, don't be shocked.

• Less non-game programming: Anything not directly related to the game broadcasts, including specials, "inside" glances, documentaries, etc., could be cut. Producers, editors, camera operators, and various additional workers are needed for that kind of programming. If Bally Sports Detroit does make significant layoffs, that would likely be the first thing to go.

• Less money for the Pistons: The rights payments for the Pistons to televise the games are, without a doubt, the highest expense. Diamond might request a reduction in the amount due.

What would the Pistons say in return? Most likely not good. The alternatives, however, are much worse, much like on a national scale. Where might they end up?

Sports Bally The only player in town is Detroit. The Pistons might have to accept a lower price unless they want to build their own network, which would cost a lot of money and effort and offer no guarantee of success.

There is no immediate threat of the broadcast of Pistons games being cancelled. Additionally, even if Diamond declared bankruptcy, they could still maintain the RSNs. But it's definitely a situation to watch because it might change how future Pistons games are broadcast.