The Diamond Sports Group, which heads up the Bally Sports Networks, is currently in Bankruptcy court. While the Cincinnati Reds do broadcast their games on Bally Sports Ohio, that leg of the Bally Sports networks is not included in the bankruptcy proceedings since it is partially owned by the Reds (a few other Bally Sports regional networks are also excluded because teams are partial owners). But with the proceedings taking place we are learning a lot about the plans for the future of the networks, even if there does seem to be some disagreements between Diamond Sports Groups and some of the leagues they own the broadcast rights for.

Several times in the last year we had heard that the Reds were among a few teams that Bally Sports was considering to drop and give the broadcast rights back to the team and Major League Baseball. That didn’t wind up happening. While the ratings don’t exactly make or break the deal, the ratings for Cincinnati’s games were better than most as they had the 4th highest ratings among the 29 teams located in the US (the Blue Jays ratings are not shared so we do not have data for them). Even in 2022 when the team struggled they were in the top half of the league in ratings. But given how many households are in Cincinnati, even high ratings don’t mean tons of eyes by comparison to some of the big market teams.

Bally Sports plans to broadcast games next season for “almost all of (our) Major League Baseball teams next year,” said one of their lawyers in court on Wednesday according to a report from The Athletic. The two teams that seem to be not included in that, of 11, are the Guardians and the Rangers. Bally Sports is attempting to negotiate with them to lower the fee they would pay to keep their games through 2024, but nothing is in place.

Baseball isn’t the only game in town for many of the Bally Sports networks. They have rights for NBA and NHL teams in many markets. Yesterday a deal was approved between 15 NBA teams and Bally Sports to broadcast their games through the current season before the teams and NBA would regain the rights moving forward. The NHL is still working a deal with them, but according to a lawyer at the hearings it’s expected to be completed next week.

Major League Baseball, however, doesn’t seem to be on the same ground as the other two leagues. They want more defined plan than what is being offered up by Bally Sports and Diamond Sports Group right now. And they want that plan fast because they believe that they need several months to set things up if they have to take over the broadcasts for multiple teams 2024 seasons. They want to avoid what happened to multiple teams in 2023 when Bally Sports failed to make their payments on time before deciding in a grace-period window to either keep broadcasting games by making a payment or to give the rights back to the teams.

So how does this all factor in with the Cincinnati Reds? Well, it appears that if nothing else, everything points towards their games remaining on Bally Sports Ohio no later than the end of 2024. While no one really knows at this point where things would go from there, it does feel like there’s at least some finality in there.

There’s not just uncertainty with where the games will wind up, but with what this will do to the revenue for the clubs around the game. This is perhaps even more important to a team like Cincinnati which had a partial ownership stake in Bally Sports. Of course it’s also very possible that the team never included any money made from that partnership in baseball revenues or spending. But even if that’s the case, not knowing how much money will be coming in from local broadcasts can and will make many teams be hesitant to push spending.

In Cincinnati’s case their current payroll is so low that they should be able to spend quite a bit before getting into any sort of “questionable” area when it comes to future payroll. Still, that could provide them with some “cover” if they don’t go out this offseason and try to add talent on the free agent market.

Speaking of……

Teams around baseball don’t make their books public. And historically it’s been for good reason – they tend to lie to the public about how much money they’ve been bringing in. Multiple leaks over the years have shown that to be true. But one team is a part of a publicly traded company. Atlanta’s got to open up their books, at least for the most part, and the third quarter of 2023 results came in.

Rob Mains of Baseball Prospectus took a look at what the numbers said and for Atlanta, things were very, very profitable. While he gets into many of the numbers for the team and where the money is coming in from, as well as the real estate holdings and how much money those are making for the club, there was something else that caught his eye – and mine too.

When the league sold the Montreal Expos in 2006 they used the money from the sale to invest in a hedge fund. Atlanta’s return in the third quarter of 2023 on that was $739,000. They also got $9,800,000 from MLB Advanced Media. Since all teams are in on both of those things, it’s fair to speculate that the Reds got those dollars as well.

There’s plenty in the article worth knowing about, so click the link above and give it a read (subscription to Baseball Prospectus required).

Three former Reds

On Wednesday night the Cy Young Awards were handed out. No current Cincinnati Reds pitcher got a vote. But three former Cincinnati Reds pitchers finished in the top five in the American League voting. Sonny Gray, who is now a free agent after spending last season with the Minnesota Twins, came in second. Kevin Gausman, who was with the Toronto Blue Jays in 2023 finished in third place. And Luis Castillo, now with the Seattle Mariners, finished in fifth place in the voting. Gerrit Cole of the New York Yankees was unanimously voted as the winner.

39 Responses

  1. west larry

    , 1) I hope that after 2024, the reds will not have such a widespread blackout area.
    i currently live in north Carolina, 16 miles north of the Georgia border. It’s a 5.5 hour drive to Cincinnati. I attended one game in 2023. Many others have similar drives to the reds ballpark.
    2) I know it’s not possible, but imagine the reds current roster with the additions of Gray, Gausman, and Castillo to it. Now that would be a contender!

    • MK

      My son lives in Indianapolis and is blacked out for Cincinnati and Chicago.

      Maybe Congress needs to get involved. Sherrod Brown got laws passed to correct NFL local blackout restrictions. Had to do with taxpayer assistance for the stadium construction.

    • Doc

      Can imagine that roster with those pitchers as long as you are imagining it without the players that were acquired for those pitchers.

      • west larry

        I know. That is why I said it was impossible.

  2. Michael Wilson

    I don’t remember why we let Gausman go. I liked him at the time. Had good stuff. Surely he wasn’t expensive at the time.

    • Amarillo

      He was a free agent. He threw 22 innings for us as a reliever, and the Giants offered him a chance to start. That was a risk, because he had an ERA over 6 as a starter that year.

      • jon

        I think the Reds could have kept him but the number was $10m.

      • Amarillo

        @Jon, Yes confirmed, good memory. The Reds decided to non-tender him, which makes sense given he had a 6ERA that year.

    • Nick in NKY

      It surely has been a little concerning about the number of relievers who struggle in Cincy, but seem to round into form elsewhere. I don’t know if you can chalk it up to experience or finally finding something new, but I hope it isn’t coaching.

      • BK

        In this case, Gausman had failed as a starter in Atlanta. The Reds acquired him, turned him into a reliever, and he regained his success. Then he left as a free agent to try and start again.

  3. doofus

    Imagine what the team might have done if Castillo, Gray and Gausman were still Reds last season? They are exactly what this team is missing. This illustrates exactly how shortsighted (and cheap) the Castellini’s are.

    But, who am I to judge ownership, after all they are the ones that proclaimed: …”We know how its done.”

    It has been 18 years and still no championship baseball on the banks of the Ohio.

    • doofus

      That is 18 years since the Castellini’s took control.

    • Little Earl

      Instead of living in the moment, think of how good things could be in less than 5 years with Marte, Arroyo, and Petty contributing for the Reds.

      • doofus

        I like tangible assets better than intangible assets.

      • JayTheRed

        I can tell you from experience that people need to live in the moment a little more often in all aspects of life. Quite hoping for a dream in 5 years or 2 years. Let’s get this thing built. Let’s win a World Series!

    • JayTheRed

      At this point I would be ecstatic if the Reds just made it to the NLCS. Or even lost the World Series.

      Obviously, I want them to win it all but baby steps.

  4. Jim Walker

    Here is another ditty in the Bally fiasco. Recall that Bally is part of Diamond Sports Group (DSG) and that DSG is owned by broadcasting giant Sinclair.

    In a recent court hearing concerning the Bally bankruptcy, Sinclair claimed to be owed money from Bally for management services provided by Sinclair but that Bally had instead “refunded” that money to “investors” and not paid them (Sinclair).

    For me, the bottom line here for Reds followers is we know Bally is being accused of improperly “refunding” (diverting) money back to “investors” which Bally’s ultimate parent Sinclair says it should have received. We know the Reds are/ were an investor in Bally. Thus things could get worse before they get better for the Reds if they received some of the money in question.

    And if this isn’t enough, Sinclair also said it expected Bally would be shut down. However, DSG said that Bally would operate through at least 2024 and perhaps beyond if it could attract additional investors or be sold to someone else. So, it appears there is corporate infighting brewing along with everything else. Buckle up and hang on tight.

    • Jim Walker

      From another source…..
      The judge has approved a plan that allows Bally to continue through the 2024 MLB season but it must commit to do so and specify which teams it will carry by Dec 31.

      However Sinclair’s motion to recover the $250M it says Bally refunded to investors is still pending. Also MLB doesn’t like the Dec 31 deadline for Bally to declare its 2024 intents and has filed a motion to force Bally to declare its 2024 intentions immediately. The judge will hear arguments on these motion Dec 8. The judge said the result of the arguments on these motions could “blow up” Bally’s approved plan.

      Nothing settled or certain other than the attorneys are getting paid,

      • BK

        Yes, very unusual to see a parent company and subsidiary in court suing each other. To date, the judge has given DSG the option to pay IAW the contract, negotiate an amended deal, or lose their full rights. I’m happy he has not let them out of the highly risky deal they knowingly entered.

      • Jim Walker

        @BK, If I read things correctly, Sinclair and MLB want Bally gone yesterday. Somebody in DSG wants to play out the string in hopes of a white knight coming along.

        Maybe DSG thinks the white night could be a consortium of MLB/NBA/NHL but the ship seemingly sailed on that possibility months ago when the 3 leagues acknowledged talking among themselves (and DSG) and then decided to go their own ways.

      • BK

        Sinclair wants to move on from a bad investment. MLB likely sees an opportunity to knock off the very unpopular blackouts. Franchises also don’t like the hanging uncertainty associated with DSG. If DSG had a good business plan, an investor or investor group would step in to buy them. Given that the business model appears non-viable under the current fee structure, we should expect some hit on long-term revenue for the Reds. Of note, MLB only backstopped the D-Backs and Padres at 80% of their expected revenue and only for one year–seems like a tacit admission that their contracts were running well above market rates.

  5. Klugo

    Gausman is the painful one there for me.

    • Old Big Ed

      Yeah, but Gausman was coming off a 2019 season where he recorded a 74 OPS+ as a starter for the Braves, which is pretty close to the 67 OPS+ that Luke Weaver had recorded for the Reds.

      The Reds got a good run out of him in the bullpen in 15 games, but I could see where (1) the Reds would not want to commit $10 million for a guy who’d been decent for 15 games in the bullpen, but had otherwise been Luke Weaver, and (2) Gausman wanting to test free agency for a chance to be a starter. And then Gausman got the short-season 2020 to further cement his progress.

      In hindsight, which they did not have in 2019, the Reds would have known that Gausman would get back on track, that the could rest his arm with a global pandemic, that he would pitch well enough in 2020 to get a qualifying offer for 2021, and that they could have preempted those two years and his free agent contract pre-2022 merely by offering him 5/$70 after 2019, coming off his Luke Weaver year.

      Chase Petty is going to have be pretty good to offset the Reds’ not having Sonny Gray in 2023, but that is possible. The Reds surrendered in 2022, so Gray would not have helped, and he just rejected a $20.3 million qualifying offer and is a free agent.

      Castillo could have been kept, too, although it isn’t clear that he would sign under the same terms in Cincinnati as in Seattle. On the other hand, I think Noelvi Marte will be an All Star, and Edwin Arroyo is already seen as the SS of the future for the Reds. Levi Stoudt and Andrew Moore also have some promise. I liked that deal then, and I like it a bit more now.

    • Optimist

      Nah – Gausman was the easiest to discard. The Reds picked him up for nothing, for several reasons explained in the other comments, and he’s since signed, likely thru the end of his career, for $130-140M total. Even if many teams saw something there, there’s no way the Reds would have kept him from pre-COVID until today. Castillo and Gray are the same category as Homer and Cueto – proven talent, but worth what for how long?

      It’s useful to pick up former high round picks on waivers, or otherwise at minimal cost (cf. Benson, Will), but retaining them thru arbitration and into free agency is another matter altogether.

  6. Mark Moore

    Time to get off this ridiculous ride of blackout areas and alternate providers. It’s not like the olden days where local over-the-air broadcasts actually happen. Last I checked my calendar, 2024 is almost upon us (23% of the 21st century completed). Stop acting like it’s 1960.

    Rant off

    • Jim Walker

      MLB/ Manfred want control of all the MLB rights ASAP. That will be the end of blackouts. The question will become how much will we pay (and to who)

      • Mark Moore

        Agreed. If the end to blackouts comes at the price of the merry-go-round providers instead of a single platform, that’s a problem (at least for me).

      • BK

        I have no idea how this will pan out but perhaps MLB forms a subsidiary that teams can contract with to broadcast their games. The big market teams like having their individual broadcast relationships. However, at least marginally, many teams could benefit by “cutting out the middle man.”

      • JayTheRed

        I have MLB TV each year and pay around $120 bucks a year for out of market games. Being a Reds fan in Wisconsin the only games I can’t watch are against Milwaukee, by the way who are very close to remaining in Milwaukee at least until 2050. Just the Governor has to sign off and it’s a done deal as of today. Gov. Evers already has said he will sign the bill once it hits his desk.

      • Jim Walker

        Mark, MLB was able to make it seamless to video stream MiLBTV games for folks as part of an MLBTV or even MLB Radio subscription. There is no reason they cannot technically do the same with Apple produced game broadcasts or Fox, ESPN exclusive TV games. The hitch, if there is one, will be how money the producers get for MLB subscribers who do not subscribe to the producers’ service but watch games produced by them.

  7. BK

    The Atlanta Braves showed a net loss for the third quarter (-$6M) and the first nine months of 2023 (-$92.9M). They showed an operating profit ($15.7M) in the third quarter and an operating loss for the first nine months of 2023 (-$14M). See page 5 of the Form 10-Q filed with the SEC. It’s certainly possible that teams don’t use related supporting assets such as associated real estate, BamTech, etc. to improve their teams. The Braves quarterly report indicates they do use their non-baseball assets ISO the team.

    • Old Big Ed

      It would take a some involved to understand that financial statement. EBITDA appears to be close to $80 million for the 9 months of operations, but it’s hard to decipher how the mixed-use expenses figure into the equation, but that appears to be where much of the debt comes from. It does look like they will need to refinance some things at higher interest rates over the next year or so.

      Their 4th quarter results will be different. They won’t have much player/baseball expense in Q4, but aside from 2 home playoff games, they also had little baseball revenue, too, depending on when revenue sharing and TV money actually comes in/out.

      • Old Big Ed

        “It would take some time” to understand …

      • Optimist

        If there is one thing baseball teaches 3rd graders, it’s math. Accounting, though . . .

      • BK

        Mixed-use revenue is distinguished from baseball revenue but counted as team revenue. In other words, the Braves don’t operate a separate company for their real estate company. It’s all Atlanta Braves revenue.

      • Old Big Ed

        Right, but that accounting makes it difficult to understand the finances of the team as an operating entity. Some of the teams (like the Cardinals) invested in similar developments around the ballpark, but most have not had similar opportunities.

        I don’t think that whole area around the Atlanta ballpark is part of the Braves’ finances. I think that most of it was developed separately, although cooperatively with the premise that a ballpark was being built. The statements show that the Braves are building an office building next door, but this isn’t really the ideal time to be building an office building, so the side business of RE development may actually be weighing the finances down. Or not.

        I don’t consider these side real estate development deals to be relevant to the finances of a team’s baseball operation. The Braves ownership wouldn’t have to sell the developments next door, if they elected to sell the baseball franchise.

      • BK

        Good point OBE. Like you, I would also like to see their 4Q data. I’m immediately skeptical of any analysis of an entity with high seasonal variances that does not cover the entire cycle (usually a calendar year).

  8. MK

    Sounds like a big chunk of change, but basically pays for the first three draft picks.