Rob Manfred Concedes Diamondbacks Could Lose T.V. Revenue

MLB Commissioner Rob Manfred addressed the media today at the Arizona Biltmore Hotel in Phoenix. The topic of the looming bankruptcy of  Sinclair Broadcasting's Diamond Sports was front and center.  Diamond owns the Diamondbacks television broadcast in partnership with Bally Sports. They also own the broadcasts for 13 other major league teams. 

Today Diamond skipped a $140 million cash interest payment, setting up a long rumored bankruptcy. If Diamond is not able to make their payments, Manfred said that MLB and the teams impacted would exercise their rights to cancel the contracts with MLB taking over the broadcasts in some format likely to be a combination of cable and streaming. 

Upon being asked directly if such an arrangement could be projected to replace 100% of the team's revenues from these contracts, Manfred was direct and succinct:

"Not in the short term"

Thus we have confirmation from the commissioner of baseball that the Diamondbacks are likely to see a reduction in television in the immediate future. How it all works out and in what format remains to be seen. Manfred was not able to reveal today the actual details of a broadcast transition team, but the impact to a mid or lower tier market team like the Diamondbacks could be severe.

Back in 2015, the team signed a 20 year deal reported to be worth $1.5 Billion.  While that averages out to $75 million per year in revenue it's presumed that the revenue slowly escalated through the years. It was also rumored that part of the deal included an equity stake, but that has never been publicly disclosed.  Regardless the potential loss of revenue for the Diamondbacks could be in the tens of millions. 

In spite of this uncertainty the team forged ahead this offseason by increasing payroll by over 20%, or $20 million. Clearly this is not the end of the Diamondbacks being a viable MLB franchise. But it stands to reason that unless there is some way to replace the lost revenue there will be limits to future investment in player payroll.