Cardinals News: Bally Sports bankruptcy could have major impact on team's finances
Recent reports may be troubling for the Cardinals' finances
The St. Louis Cardinals have been in the news this off-season in regard to their finances, with the majority of the talk surrounding their lack of spending. Perhaps the bigger story in question is the Cardinals' current media rights deal with Diamond Sports Group, which appears to be getting worse as the off-season goes along.
Our own J.T. Buchheit covered the initial reports of Diamond Sports Group's inevitable bankruptcy back in December, but recent reports seem to indicate that dark times may be ahead. Bloomberg reported that team payments may be at risk in the process, which poses trouble for the Cardinals' immediate financial future.
No, it's not like this will crater St. Louis' finances, but it may be a major reason we do not see the Cardinals take a significant step forward in payroll any time soon if things are not ironed out. Daniel Frankel of NextTV said the following about the situation:
"Meanwhile, pro teams relying on TV rights revenue from their deals with the 19 Bally Sports RSNs will face severe belt-tightening, since rights deals with them can be terminated amid the restructuring. For example, MLB’s St. Louis Cardinals have been identified as a franchise likely to take one of the hardest blows, since so much of its revenue comes from RSN TV rights"- Daniel Frankel
While long-term the Cardinals could benefit from a change of scenery in their broadcasting rights, they are in the middle of a 15-year. $1.1 billion deal with Bally Sports Midwest, and have an ownership stake in the network. Until a new solution arises for the club, there'll be a dark cloud hanging over the situation.
Derrick Goold captured some of the Dewitt's comments on the situation at Winter Warm Up, as Bill Dewitt III commented on how the situation as a whole is frustrating for owners around the league (quote from Goold's story on the St. Louis Post-Dispatch).
"“The territorial rights geography of MLB is like 100 years old, maybe,” said Bill DeWitt III, Cardinals team president. “It’s been modified with expansion, but you can imagine it creates distortion because of the antiquated nature of it. There is a lot of talk in the owners’ meetings about cleaning it up. Put it that way. It’s a bigger issue than just us. I think these blackout areas are really problematic in baseball and everybody knows it."- Bill Dewitt III
The Cardinals have the fanbase to warrant starting their own network, similar to the Yankees and their YES Network. Even if they do not go that direction, they've drawn the highest TV ratings in all of baseball in the last two years, making them extremely desirable for any network.
We'll continue to monitor the situation over the coming months. Let's all hope for not only a quick resolution to this situation but a lucrative one that entices the DeWitt family to invest more money into the club's payroll moving forward.