Last month we heard about Cincinnati Reds COO Phil Castellini tell the Rosie Reds that he doesn’t believe player contracts should be guaranteed, and that on average 14 teams are “out of contention” when the season begins, and joked that even if the team has good players they “couldn’t keep them”, and that the team was a “non-profit”. He had more feet in his mouth on that day than he has feet. On Thursday, C. Trent Rosecrans of The Athletic asked MLB Commissioner Rob Manfred about Castellini’s comments.
“When you hear a team president in January say that his team already has zero shot at contending or even being a winning team, what is your reaction and also do you agree with him that a quarter of the teams to a third of the teams have zero shot before we have a pitch in spring training?”
Manfred smirked for a second in the middle of the question.
“I think that most people who pay attention to our game realize that we do have a disparity issue in the game both on the revenue side and consequently in the ability to spend on players,” said Manfred. “I think sometimes in markets that produces frustration to what I regard to be unfortunate comments. Not helpful.”
The Bally Sports debacle
You’ve probably heard about the Bally Sports issues by this point, but if you haven’t, they are on the verge of filing for bankruptcy. They aren’t going out of business, but as a part of their expected bankruptcy they are going to be skipping the big payment due to the teams they run broadcasts for. That’s going to lead to plenty of issues – including some teams not getting expected cash flow. But for fans it creates a question of where to watch games?
Major League Baseball seems to have a plan. Evan Drellich of The Athletic has plenty of details about the plan that MLB has in place if Bally Sports doesn’t come through with their payments to teams and what happens from there.
If the payments are skipped, that would be a breach of the contracts and it seems that MLB would then void those contracts and at least in the short term take over the broadcasts themselves.
“We have taken those preparation efforts really seriously,” Manfred said on Thursday. “We know that we can produce games in the event that Bally is not broadcasting. We know that we can put those games up on in conjunction with MLB.tv digitally. And we are in the process of trying to work out arrangements that will put us in a position to make those games available within the cable bundle as well.”
One thing that opens up if MLB takes over and gets out of their current contracts is that it could allow them to lift blackouts for those teams. And that is something that the league wants to do now that we’re in an era where in many cities around the county there are no real options to even get the regional sports network if you wanted it because companies have dropped the channel from their lineup in a dispute over how much the RSN wants to charge for it.
As for how the league plans to try and at bridge the gap on traditional cable/satellite bundles, the rumors are that they would put the local games on MLB Network (as well as making them available on MLB.tv) while they try to find possible other solutions. That of course runs into a similar problem as the RSN situation does in some areas as MLB Network has been dropped from providers.
Other tidbits and notes
– Christian Encarnacion-Strand’s back was acting up and he had it checked out. This morning manager David Bell noted that he would be fine within a couple of days, reports Charlie Goldsmith of the Cincinnati Enquirer. Good news for the third baseman who is coming off of a 32 home run campaign in the minor leagues last season and is looking to make an impression in Arizona and try to win a job on the roster.
– Jonathan India is looking to take on more of a leadership role this season with the Reds. He talked with Charlie Goldsmith yesterday about setting the culture that’s different this year.
I want to set a culture this year that’s different from the past,” India said. “Everyone has the same mindset, no matter who it is. That’s what we need. That’s our ticket to success. Everyone having the same mindset of competing every day no matter the outcome.
It’s a bit unusual for such a young player to try and take on that kind of role, but Cincinnati isn’t exactly a roster full of veterans, either. That’s not to say there aren’t some, though. Wil Myers has a decade in the league, Joey Votto’s pushing two decades, Luis Cessa’s been around the league quite a bit, Curt Casali’s got plenty of time in the big leagues…. but someone’s got to do it and at least for now it seems India thinks he can be that guy.
I think Jon India has a lot of personal charisma. I, as a fan, appreciate his willingness to speak up and try to lead and inspire his teamates.
Joey Votto has been in the league since 2008, and while he has certainly had some great years, and I think he has the respect of his team mates, I honestly don’t know if he has ever really “stepped up” to be a team leader. I am not in the clubhouse and can’t judge.
And Manfred’s remarks about Phil C. point up to a big problem in ML baseball; the actual poor leadership of the league. Phil C. comes across as a jerk, but you would hope the Manfred would actually say something honest and meaningful, but mostly we get a smirk out of a very well paid commissioner. Baseball really has a big competitiveness problem, but Manfred will say nothing about it, because the handful of the richest franchises would be upset if he did. Phil C. may be a jerk, but Manfred may actually be a bigger problem because he is complicit in the competitiveness issue that plagues Major League Baseball.
All professional sports are actually in trouble, due to over-saturation of the sports entertainment market, and now the rise of sports gambling, which apparently has the approval of a lot of pro-sports “leadership”, because they see it as another means of “promotion” and making money on their team/sport. Widespread sports gambling will likely really ruin almost all sports, as it is an invitation to corruption. Ask Pete Rose, and he would probably bet on it.
I appreciated Manfred’s candor. I mean, isn’t it the player’s union that didn’t insist on any sort of salary floor? They rubber stamped the tanking model that empowers the Castellini’s to operate their business this way.
Rob Manfred is the Commissioner of Baseball. If he didn’t think the contract was right, he should say so. That doesn’t mean insulting the player’s association, the owners or anyone else.
And yes, this is kind of what the players want, but is it really good for the long term interests of the game? I think not. Manfred should say so, or else get another job somewhere else.
You would actually expect some articulate leadership from him. If he spoke out about it sometimes, it might actually lead to something better when the next agreement is negotiated.
I expect very little from Commissioner Rob Manfred regarding the competitiveness and disparity of MLB. He’s a New Yorker and a Yankee fan. He basically does the bidding of the majority of the 30 wealthy team owners and they pay his inflated salary. The Reds need a team leader and I hope Jonathon India steps forward to fill that role.
I think Votto has also been in an awkward position where because his salary is so much higher than everyone else’s on the team, it’s difficult for him to take too strong of a leadership role. Not Votto’s fault, but he’s aware of what everyone is making, and vice versa. I do think last couple years Votto has started to say “F it” and just enjoy being out there, and let his personality out more.
As a result, Votto is almost more comfortable leading the fanbase than the clubhouse, if that makes sense.
@David, I’ve pasted the link to a video of Manfred’s answer below. First, I didn’t see him smirk. He dropped his head at the question, clearly uncomfortable. Second, he began his answer by saying, “I think most people who pay attention to our game realize that we do have a disparity issue in the game, both on the revenue side and on the ability to spend on players.”
Thank you for the link. I was basing all my comments on what Doug had written, or what Doug had excerpted from what he had read (not blaming Doug for the interpretation).
But it is sad that there seems to be so much apathy about trying to fix what is obviously wrong. I hope Rob Manfred continues to talk about this and a possible solution. Talk may be cheap…but it’s a start.
Manfred’s comment was essentially “Castellini is right, but I wish he wouldn’t have said it outloud.” And we can despise Reds ownership all we want (and there is certainly some justification for it), but the system is broken and means the Reds can’t be a legitimate contender every year. They can only build to compete in windows. Like it or not.
David, I agree about JV’s lack of leadership, and I’ll add, his acceptance of losing. I am a lone wolf on this forum questioning what JV has brought to the franchise. When a player signs the huge contract, he has to become the leader and tonesetter. He has not.
Number 14 is not in favor on this board. He did not and would not accept losing. There were several leaders on the BRM, but he was chief among them. He still has more than twice as many hits as JV, and is the greatest hitter in Reds history. I stand by it.
The two players in Sport that I know of that HATED losing, and would be kept awake at night by it are Number 14 and Larry Bird. I would start my franchise with the beginning of those two’s careers given the opportunity, and let everyone else have the next two picks.
I think Joey has been a really great player, and I think he leads by example. He works hard, has a great attitude about each at bat, has played over pain and injury.
Having said that, I think he is kind of an introvert, and not a big, expansive personality. That’s just the way he is. I think he wants to lead (and he does by example), but he is just not an outspoken guy. He can be funny and articulate in interviews, but I don’t think he has that charismatic personality that makes him a leader of men. It’s just the way he is.
I agree on the introvert part of the conversation. It can come off as aloof at times, and while that could/should not be a ding on his totality of being a baseball player, it is. It comes with the territory of a huge contract. And in that, he’s not great or even above average.
I have told this story before. In 2015 we went to a day at Spring Training. My son was 8 and wore his JV jersey. How lucky were we to come across a practice field with only JV taking ground balls from a few coaches? It was a small field (infield only). We watched for about 45 minutes. In that time, another 7 or 8 small groups gathered (each with a couple of adults and a kid or 2). Many of the kids, like my son, had on their Votto jersies.
At no time did he acknowledge those kids. No wave or tip of the cap. Nothing. When he finished, he went out through the dug out without looking at those kids who he had to know were there. There are so many things that he could have done with very little effort, yet on that day he did none.
My son was heartbroken. My wife hates JV because of it. I get where she is coming from. It was a bad look.
These are things that come with the territory when you sign that contract. If you don’t do them, it will be noticed.
If MLB takes over the broadcasting of some teams, I wonder if that could eventually lead to a situation where there is more tv revenue sharing to alleviate some of this revenue disparity which Manfried acknowledged?
As far as leadership, outside of Votto, India is one of the most tenured Reds’ positional starters.
Votto 1991 (games w/the Reds)
That’s what I’m hoping. MLB is wanting to go it alone on the streaming front from what I’ve read. I was doing some back of the napkin calculations last night. If they had 30M subscribers at $199, that would bring in 5.97B. That seems like a lot of subscribers, it’s approximately 9% of the us population. That’s not including ad revenue, or cost of producing and streaming the games.
Currently there is 2B in National TV deals, so extending that with a streaming service seems to be an easier path. It will be interesting to see how it goes.
The problem with implementing this idea is that 16 teams will still have RSN contracts in place. The largest markets are in the unaffected group.
30M seems like a very high number, as it’s 1/4 of all US households.
I certainly wouldn’t expect 1/4 of US households to pay $200 to watch baseball on tv.
Which means, if the goal is 25% household saturation, MLB content would also have to be included in pay-tv packages.
But with more households moving away from $$$ cable/satellite, to cheaper streaming, MLB would likely need to pursue inclusion in Hulu, Amazon, Netflix, etc. But if they do, I doubt those streamers would offer anywhere near $200 per subscriber to MLB.
@AMDG, That’s what I was trying to say. I can see now my last paragraph wasn’t entirely clear. I’m in the camp of adding to the existing 2B in national deals, by teaming up with a Prime, Apple, Netflix, etc. That 2B worth of games are just a fraction of the current games televised. There would be plenty of room for growth away from the RSN model.
Trying to do it alone is a high risk, high reward venture. It’s one that even the NFL isn’t even doing. The NFL has over 11B in national deals. If baseball could get 60% to 70% of that over the next few year, they’d be in great shape.
@BK, the fact that 16 teams are currently under contract is only a temporary setback. Those 16 teams deals are due to suffer the same fate as these 14 deals. Cable is a dying platform, and streaming is taking over. Less than half of the homes in America now has a cable subscription. That number continues to plummet, while streaming continues to grow.
@MBS, see my comments in the new post at the bottom of the page. Cord-cutting is certainly a contributing factor in Sinclair’s current problem, but I don’t agree that other RSNs are necessarily looking to renegotiate or get out of their current deals.
Great to read that India is attempting to change the clubhouse culture. Like with most good teams, it comes from the players. To put it nicely, Bell has a charisma deficit and takes the ‘don’t get too high or low’ mindset to the extreme. Hard to see how grown men, especially these alpha males, would derive any inspiration from that. I wonder if/when India follows thru on his pledge to show more emotion ‘even if it looks like too much from the outside’ will cause friction with Bell.
Curious—if MLB takes over game broadcasts, who would the announcers be??
Why would a bunch of alpha males need to be inspired by someone else.
@ StillARed I tend to agree. I know people love to talk about “leadership” being so important and all, but I think it’s mostly psycho-babble for the most part. I guess “leadership” is an intangible that is nice to have and can possibly make a difference in a tight game or maybe in a close series. But we are talking about a team that lost 100 games last year. The greatest leadership in the world isn’t going to change that. Talent wins games. If you don’t have talent then leadership, determination, motivation or whatever buzz words you want to use, is not going to make a difference.
But there is no convincing anyone one of that.
Why would a bunch of alpha males accept losing?
First, none of us are in a position to know who on the Reds is a leader; there are a number of effective styles of leadership and not all of them are visible from the stands or the tv screen. Second, every game has a winner and a loser and no team gets through a season without losing. It seems safe to say that none of the players like losing, but “not accepting” it will not overcome a roster that isn’t competitive. We’ve all heard various excellent relief pitchers say something to the effect that, when they have a bad game. the only way to function and perform in the next game is to forget the bad one.
I know what I see and hear.
A guy who HATES to lose will let you know. The public will know. It will be talked about on the radio broadcast. The Manager will talk about it. There has been none of that in the last 20 years. Same with Leadership. It will be talked about. It’s not there. It is part of the problem.
Number 14 believed in letting the other guy lose. Everyone knew it.
“Everyone knew it?” Hating to lose is not the same thing as leadership. It may be that Joey isn’t a leader or it may be that nothing is further from the truth. We can all form impressions, but we don’t know. I also doubt that mlb clubs only give big contracts to guys with leadership chops; excellent performance seems a more likely common denominator.
When you sign for big money, especially in a small market, you are the face of the franchise… like it or not… comfortable with it or not.
Maybe he is a great leader, and maybe he hates to lose, but I highly doubt it. That is the kind of thing that would be talked about on the broadcasts and 700WLW through related content.
It’s not there. Never has been with him.
We do know that he has mentored other hitters–Jay Bruce comes to mind. He has been the face of the franchise, but I don’t believe that that is synonymous with publicly obvious leadership and, besides, most teams–all teams, probably–would not hesitate to sign and extend a great hitter regardless of his leadership proclivities. And I don’t think Votto would be the hitter he has been absent tremendous competitive determination.
Greenmtred, I get that you and I will disagree on this. He has been the face of the franchise. They are 140 games under .500 during that time and 2-9 in the playoffs, and he did not perform during those playoff opportunities. Those are all facts.
Some say he didn’t have enough of a supporting cast to win during his time here. I disagree. Up until the last 2 years, they have had enough to win in the playoffs… in my opinion.
Some say he is the greatest hitter in Reds history. I disagree with that too. Unless he has a resurgence this year, he will not have half as many hits as the other guy.
In terms of intangibles, there is little to no evidence of leadership, or a drive to win, and my family’s only personal experience with JV was quite negative.
JV has had a combination of power to go along with his hit tool the other guy didn’t have, I will admit that.
You mention teams would extend a great hitter regardless of leadership, and I agree they would. At the same time, the vast majority of these long term contracts are bad for the team. And, I think the JV contract has been bad for the team too.
We all have opinions, and that is mine. This board is a place for opinions.
You’re absolutely right, Greenfield; having differing opinions and discussing them is one of the things that make RLN fun, and I’m enjoying reading your take on Votto and the Reds. I’m not convinced myself that he’s the greatest Reds’ hitter; he might be, but the other contenders played in different eras and it’s hard to judge. As to the Reds’ futility during his tenure, he has played on a few decent teams, but baseball seems to me to be a sport in which one great player can’t really carry a team in a sustained way. Think Mike Trout. Ted Williams was great, but his Red Sox were not perennial champs; the Yankees were in the way, and they had more good players. Ernie Banks was never on a WS winner.
Being a blow-hard does not make you a leader either. You can rant and rave all you want, if the team is bad its bad…and ranting and raving in public while still losing just makes you look silly and probably would have the opposite effect in the locker room. Who on the team last year had a performance that would allow them to rant and rave at everyone else. Not Joey. Not the new leader India. The best you can do is to make sure you and everyone doesn’t give up on themselves and pick each other up.
Rob Manfred Mann’s (Scorched) Earth Band, Blinded By The Light. Let’s hope Phil got a call.
I just get the feeling that the Castellinis are mad at the world right now, especially the baseball world. It’s obvious they are not one bit pleased with the latest CBA and they want the world to know it.
Would this have any effect on the broadcast teams for television. Are they under contract to the team or Bally Sports?
I don’t think so. When Thom Brennaman was suspended, the announcement came from the team. Similarly, when Sadak was hired, the article stated that the Red’s Front Office had conducted the interviews leading up to his hire. Additionally, the Red’s website lists each of the broadcasters as working for the Red’s Television Network.
Hope it means Sadek is toast
Yeah, I really think we can do better than Sadak, but since the C’s hired him, guessing he was the cheap option.
Manfred said the same thing as Phil, just tried to couch it more. What he didn’t say is more noticeable by its absence as the league is doing nothing to rectify it.
India is also more about what he didn’t say. If he says people need to be in the same page and need to play their best regardless of how the game is going. One could infer that (1) there were people on the team who were not playing their best, and (2) there is no direction from the top, ie Bell.
For the record, I don’t think contracts should be guaranteed; I agree with Phil on that one.
I had the same impression on India’s comments. I also liked that he dropped 10 lbs going into this season, instead of trying to be something he isn’t. The Reds need a leader. As for Phil & Manfred, my guess is Manfred loves Phil. At least, he looks good by comparison to Phil.
I think India may have been one of the folks who suffered the most, along with Votto, in the dismantling of the ‘clubhouse’ through the Suarez, Winker, Gray, Castellanos, Castillo, Mahle, etc. purging. His spirit and comaraderie was readily apparent in 2021, as was Votto’s but a lot of the clubhouse was gutted. How is that not going to have an effect on a player, on a team?
The Reds in 2022 recollected after their woeful start only to have the clubhouse gutted again…and the subsequent collapse which no doubt included their playing spirit.
Seeing game after game blown by a deplorable bullpen has to be painful to the esprit as well. To see Minor run out every 4th day and watch him mail it in while collecting his $10M and give blase summaries of his lousy work must have chaffed as well.
Bell’s surreal post game interviews reflect his level of disconnect from what is happening around him. Blowing up and getting tossed now and then for petty calls isn’t a replacement for lighting a fire and for daily accountability for those not putting out.
“Guaranteed contracts” are a convenient and lazy target. In a field where players get hurt in-the-line-of-duty how does Phil or anyone expect people to play knowing that if they get hurt their contract can be voided? Getting hurt screwing around on your boat (Finnegan) or in your swimming pool (Suarez) or threatening your wife (Chapman) is another story. Blowing out your arm because your pitching coach is urging you to throw 105 mph and get a higher spin rate on your slider is another thing altogether. Part of what guaranteed contracts do is establish shared risk. Shorter contracts are one key for protecting both parties as is careful language of just what is guaranteed. Not getting rid of ‘guarantees’. Castellini, as is his custom, is bottom trolling.
The ‘what ifs’ you cite are what disability policies are for. I practiced medicine, made far less in my career than one year of what some of these guys make, and I had no “guaranteed contract”. I could have caught anything that came into the office or have been disabled while trying to save someone’s life. No matter. Disability insurance would have paid me a percentage of my salary up to a defined maximum monthly amount. My employer paid for the basic policy. If I wanted more disability income, the premiums came out of my pocket.
If the Reds didn’t guarantee contracts, hypothetically speaking, they would still be able to sign a full roster and have some very decent players. There are a limited number of MLB spots available and, to paraphrase Phil, “where else are the players not wanted by the other 29 teams going to go”? Seems to me that guaranteed contracts have hamstring the Reds rather than made them contenders.
Football seems to have figured it out, and injuries are a lot more likely in that sport. Honestly I don’t understand why the MLB hasn’t stolen all the NFL roadmap to creating a fun, exciting, and fair league.
I think the length of the guaranteed contracts is likely what Phil C. is taking exception to. Lots of 10+ year contracts were signed in the offseason. Of course, just speculation on my part.
The Reds should be fully capable of constructing a contract that protects their interests as well. Votto and Moose’s contracts run for a certain period of length. In that sense they are ‘guaranteed’. If Votto goes on the DL, what, does he not get paid? No, he gets paid on the assumption he will return to play. They can insure those contracts the same way other performance contracts (acting, musicians, etc.) have been done. Or in the same way yours was and mine now is. I pay a premium for extended disability coverage as well. I don’t know of any contracts the Reds are paying for players who are totally disabled. It’s the length of contracts that have complicated the Reds’s profit making. And making bad bets on marginal talent. Guaranteed contracts were handed out as part of a competitive bidding process for talent. It’s in their power to find creative solutions more to Phil Castellini’s liking or to suffer the consequences. And pass them along to the fans.
When teams start paying guys their actual worth before they reach free agency then maybe they can start talking about non-guaranteed contracts. But when a guy can literally be the best player on the planet and make $700,000 because he hasn’t reach arbitration yet, they can shut their mouths about what should and shouldn’t be guaranteed to the players.
The pay structure in MLB is negotiated in collective bargaining. MLBPA prioritized increasing the CBT levels which helps elite free agents at the expense of younger players. It also inflates free agent contracts which hurts competitive balance.
Also, nine of the top 10 players in terms of bWAR in 2022 were on arbitration contracts or free agent contracts. In short, the best players last year got paid. It anamolous when a league minimum player is truly elite.
“For the record, I don’t think contracts should be guaranteed; I agree with Phil on that one”.
Or at least a weight and conditioning requirement (Moose).
I don’t think guaranteed is the issue. I think bad contracts are. It protecting the company’s interests in a contract gets you fired in the “real world. Properly written, Moustakas would have been deemed in breach of contract. Poetically, I see the lard bucket is still a free agent.
I wonder..Anytime David bell says a couple days it usually means weeks…..
At least with Dusty Baker we all knew that if a player was slacking, he would hear about it from the manager. Dusty didn’t put up with that lazy or lollygagging.
One of the better articles you will read by Charlie Goldsmith on Tony Santillan. Back injury last year and how it affected him mentally. “ I was miserable….It was pain non-stop…Santillan asked to go home in July “to get himself together”.
Hes coming back and building his arm up and David bell really supported him. Sounds like Santillan should be back physically and mentally by mid april. “Everything feels normal again”
Im rooting for that guy.
Great update, thanks.
Tony is a Seguin, TX man, just down the road from me. Seguin is a great town and I’ve long pulled for him besides.
Glad he feels comfortable being candid and great to hear Bell has been supportive.
I rag a lot on Bell for his ‘managing’ but have no doubt he’s capable of making a supportive connection with players.
All the best to Tony. Would love to see him back on track to excellence.
Me too. Like his attitude on the mound a lot.
So glad India is stepping up. Someone needs to do that. I think it was either him or Stephenson. Both seem like nice guys so not sure it comes natural to either of them.
I’m actually looking forward to seeing the young guys play. I understand we’ll take our lumps but at least we will begin to see the future take shape. And as those still in AAA and AA begin to come up, this team will be really exciting to watch.
No guaranteed contracts…Hmmmm… I wonder if the Reds will ever extend India or Stephenson. Will they just trade them in a few years?
It seems like that’s the plan. Anyone 2-3 years away from free agency is probably going to be on the trade block. I am hoping that the owners will go back to 100 million payroll when the team is more competitive and Bally’s issues are resolved but at this point, I’m skeptical. A 60 million payroll in 2024 would not surprise me.
I empathize with Phil. His daddy hands him opulent wealth and a baseball team. The team has a complete monopoly over the market, taxpayer funded stadium, guaranteed revenue sharing and some streaming money on the side. His life is so unfair. Let’s throw a pity party for Phil. And please ignore the teams like Cleveland who spend less then the reds and produce much better results. It’s all cause it’s unfair, not because Phil is a moron.
Guaranteed contracts aren’t going away so no use in complaining about them. The union isn’t about to give that up. Teams need to be smart about it (like not guaranteeing 4 years to a guy who lived off 1 year contracts in 2017-2019 and very likely didn’t have any other multi year offers when the Reds signed him).
The Reds owners remind me of a bunch of dogs. Nothing guaranteed! Here is the plan: While the Dodgers, Yankees, and Mets are feasting at their table, we will look for the scraps they throw on the floor. Let’s go boys!
I went through Diamond Sports Group’s most recent quarterly financial report. Here are a few thoughts on what went wrong:
1. They took on too much debt. The purchase from Disney closed at $9.7B. As of September 2022, DSG had about $8.7B in long-term debt. Keep in mind interest rates were at historic lows when the transaction closed in 2019. In 2022, DSG paid over $500M in interest expenses.
2. In my estimation, DSG acquired the RSN business close to its peak value. Many RSN deals over the last five years or so included equity stakes. My analysis is that this happened because both sides realized that the market price for a team’s local games had begun to exceed the expected revenue from the production and distribution of the games.
3. COVID hit in year one following the transaction. As a result, they lost revenue from a reduced inventory of games and a corresponding loss in advertising revenue. As a result, DSG got behind financially right from the start.
4. By the end of 2021, interest rates were at 40-year highs driving up the cost of DSG’s debt.
5. Cord-cutting has accelerated over the last few years resulting in reduced revenue.
I expect DSG to file for bankruptcy in the next 30 days–they missed a loan payment this week and are running out of cash. Reduced revenue and climbing expenses are a recipe for financial calamity. I don’t know how much this will cost the Reds this year, but it will be a substantial hit. Also, I doubt any of the teams involved will be able to generate comparable revenue from what DSG was obligated to pay for the RSN operation near term.
Other RSN providers are affected by cord-cutting, but DSG had several factors working against them that may not impact other providers.
The junior bonds (which I understand to have be behind about $3 billion in senior bonds) were apparently trading at about 5 cents on the dollar in early January. I think their only value would arise in a conversion to a small equity position, as negotiated in bankruptcy or the expectation thereof. The financial loser here is not Sinclair, but instead high-yield bond investors, who are large and very sophisticated entities who can handle the loss. And it does appear that the teams like the Reds will lose some revenue for at least this year.
The public disclosures on those junior bonds would be interesting to read, but I’m not going to track it down.
I maybe incorrect but I believe a few other teams besides the reds are impacted by this pending bankruptcy. As far as Phil’s comments Manfred did not deny the foot and mouth disease opinion’s from Phil. If we are headed into a major recession then fans will reduce spending on entertainment a lot faster than athlete salary increases.
Evan Drellich has a new article with paywall on owners forming an economic reform cmte to start working now on 2026 CBA
The RSN collapse plus steve cohen spending for the Mets has enough owners unhappy that Drellich says if they had to vote on a CBA right now… the commissioner wouldnt have the votes and no commissioner wants that situation. LA dodgers owner chairs the cmte…smh
Its pretty bad when the commission of the national pastime says there is a major problem with revenue disparity amongst teams. Manfred said before even discussing salary cap – they have to figure out the revenue disparity problem