MLB to send Padres at least 80 percent money owed by Bally Sports, Rob Manfred

Major League Baseball is promising the Padres will not receive less than 80 percent of the money Bally Sports was supposed to pay them for their TV rights this year, commissioner Rob Manfred said Wednesday. How? By paying the difference out of the league’s coffers.

“We arrived at that number as something that would prevent financial distress at the club level, the ability to pay players and those sorts of things,” Manfred said in federal bankruptcy court in Houston. “We didn’t feel like we should be in the position of guaranteeing somebody else’s payments, but we wanted them to have enough cash flow to prevent a disruption of our business.”

The 80 percent guarantee is only for this season and also applies to the 13 other teams whose games are carried by Bally Sports, an official briefed on the arrangement who was not authorized to speak publicly said. Bally Sports and its parent company Diamond Sports were the broadcast partner of 14 MLB teams until midnight entering Wednesday, when they ceased to carry Padres games. Diamond and Bally are in bankruptcy proceedings.

“Clubs had cash flow concerns,” Manfred said. “We took a look at the 14 clubs, what their contractual commitments to players were, what their cost structure looked like, the debt they had. … We said, ‘OK, everybody needs to relax here, we need to work our way through this,’ and in order to help the clubs, give them a little peace of mind, we said to ‘em, ‘Look, no matter what happens, we’ll backstop you at 80 percent of what you expect to get under your media deal.’”

Manfred spent close to two hours on the stand Wednesday, rocking with a Leo Mazzone sway during cross-examination. Aggressive and pointed at moments, the commissioner criticized a pair of high-ranking executives at Sinclair, the parent company of Diamond, including one whom Manfred alleged threatened the commissioner with bankruptcy.

Overall, Manfred painted the way Diamond and Sinclair did business in a poor light.

“We had a lot of complaints from clubs,” Manfred said. “They would schedule meetings and not show up, and it just, it didn’t go well.”

Multiple times, Manfred underscored that MLB had less than a day’s notice that Bally Sports was going to miss its payment to the Padres on Tuesday.

“They notified us literally, literally, less than 24 hours before they were going to go off the air, that they were going to stop broadcasting Padres games,” Manfred said. “That they were not going to cure their default. The Padres … terminated that agreement. MLB stepped in.

“Because we had literally, literally, hours of notice in the middle of the season that we were going to take the Padres over,” Manfred said at a different point. “The idea that you’re going to be able to generate meaningful advertising revenue at this point — that’s just not possible. That’s one of the reasons that we reacted negatively to the lack of notice as to what was going to…