Amazon bails out Bally’s. What does that mean for the Cardinals and Blues on TV?
The people who run the St. Louis Cardinals would prefer if all of the fans who were interested in watching their games were able to switch on their televisions and watch with no further hoop jumping.
That simplicity will likely remain beyond reach despite the recent developments in the ongoing saga of regional sports networks, but other improvements seem to be coming in the not-too-distant future.
In court proceedings in Houston on Wednesday, Diamond Sports, the company which operates the Bally Sports family of networks – and therefore is responsible for the local broadcasts of the Cardinals and St. Louis Blues – announced a plan to exit chapter 11 bankruptcy after receiving an infusion of cash from Amazon as well as its existing investors.
That resolution comes weeks after a failed play in which Amazon attempted to work directly with Major League Baseball in order to secure game rights for its Prime streaming service, offering only $150 million for a package of teams. Now, for that same amount, Amazon will seemingly have operational control of Diamond, and from there, the teams and leagues will hash out a new partnership.
Speaking on Monday to the media assembled at the team’s Winter Warm-Up, Cardinals president Bill DeWitt III seemingly previewed the developments which would become common knowledge just days later.
“There’s been rumors of the big boys in the bankruptcy auction court coming in and saying, ‘you know, maybe we’ll buy these rights,’” DeWitt III said. “You’d have an intermediary again to deal with. Instead of Bally’s, maybe it’s someone else. So there are multiple scenarios out there that could play out, and we need to be ready for all of them.”
DeWitt III and his father, team chairman Bill DeWitt, Jr., said that the club anticipates receiving its full rights payment for the coming season and that concerns over the RSN instability did not impact their payroll plans for the winter. The current deal, signed in 2015 and covering the 2018 through 2032 seasons, is worth in excess of $1 billion and granted the Cardinals a 30% share in ownership of the network.
Crucially, it also preserved the team’s in-market digital streaming rights. As various plans for escaping bankruptcy have been floated around Diamond Sports over the last year, the possession of those rights – as well as MLB’s ability to cover as much as 80% of a team’s lost television revenue – has been a bulwark against instability.
Now, even as the team anticipated the likelihood of reclaiming all of their television rights after this season, they find themselves forcibly pivoted into a business relationship with one of the world’s largest companies but in possession of substantial leverage.
The short term impact on Cardinals fans will likely be negligible.
While some teams could see games available for streaming in the market on Amazon Prime (for, of course, an additional fee) as early as this summer, that is not yet the case with the Cardinals due to their possession of their rights. Bally Sports has offered a direct-to-consumer model for access to Blues games but has seen only modest success; numbers released by the company suggest their rights payments to the Blues are generally chalked up as a moderate loss that secures them the ability to turn a substantial profit on the Cardinals.
Behind the scenes, employees with the current network have heard assurances from ownership that the team plans to maintain its existing broadcast, even if the network on which it is aired and some of the corporate names and logos attached to that network were to change.
One goal seemingly shared by the Cardinals – indeed, the league at large – and its potential new streaming partners is the end to the archaic blackout policy. Originally enacted as a hedge against cable television subscribers opting not to attend games in person, those policies now only stand firmly in between fans and their ability to watch games.
The DeWitts on Monday repeatedly expressed that frustration as a desire to put more “eyeballs” on the “product.” That is perhaps a cold way of discussing fandom, but it’s also the reality of a regional company like the Cardinals attempting to secure their national brand.
“I think we’ve got a pretty darn good market and bigger than obviously what the city of St. Louis is, because we’ve got a broad fan base,” DeWitt, Jr. said. “One of the disappointing things as time has gone on is we’ve lost subscribers. It’s not just the money from the subscribers, but it’s potential loss of ability to follow the team. So, you know, this is a big project for us.”
DeWitt III described the television dilemma as “at the top of my list” of the issues which cross his desk, spending whole days at a time mired in discussion with potential partners, current partners, other teams, and stakeholders which could impact the future of Cardinals baseball on television.
As recently as Monday, the possibility of a fully in-house network partnership with the Blues was under discussion, but Amazon’s involvement is certain to alter those discussions.
Diamond does own streaming rights to the Blues, so when the dust settles, it’s likely that they would be rolled into whatever local access package exists through Amazon Prime. There are negotiations to be had and staggering checks to be written, but Wednesday’s news seemingly makes a deal between Amazon and MLB’s teams, including the Cardinals, inevitable.
“It’s disappointing when we have fans who can’t get our games,” DeWitt, Jr. said. “I do think one of MLB’s goals is to make sure all fans can get all the games that they want and not be cut out of certain games that aren’t available to them because of the current model.”
Even in the last handful of days, the model has changed again.
