More developments in this ongoing saga that probably won’t change anything for the Twins
The trade deadline is next Tuesday, July 30 at 6 p.m. Eastern time, and the Twins, 5.0 games back of 1st place Cleveland and in a wild card position as of this writing, should be looking to add to their roster. However, the paths for Derek Falvey to make meaningful additions to a contending team will reportedly be hampered by the payroll constraints that have been in place since last winter. That likely means the Twins’ front office will walk some kind of balance between adding and subtracting over the next few days, if they do anything at all.
Of course, one of the major issues contributing to this whole situation is the bankruptcy situation with Bally Sports’ parent company, Diamond Sports Group, which James has chronicled for us at Twinkie Town over the past year.
At the same time, Diamond also has a dispute with Comcast that resulted in the Bally Sports regional sports networks not being broadcast on Comcast cable in 12 of the 14 MLB markets for which Diamond has broadcast rights.
Things on both fronts had generally been in a holding pattern in advance of a confirmation hearing in bankruptcy court scheduled for July 29.
A few weeks ago, we learned that Diamond and Comcast were reportedly negotiating a new carriage agreement to restore MLB broadcasts on cable in those markets — but optimism was not high. At the same time, Diamond was said to be negotiating broadcast rights deals with the NBA and NHL.
Yesterday, lawyers representing Diamond requested and received a delay of that July 29 hearing (which had already been delayed from its original June 18 date) from the U.S. Bankruptcy Court for the Southern District of Texas. A new date for the hearing has not been announced but could be held as soon as late next week.
The reason Diamond’s lawyers requested and received more time? They think they are close to reaching new deals with Comcast, the NBA, and the NHL.
“The reason we need more time, Your Honor, is simple,” Hermann [Diamond’s Counsel] told Judge Christopher Lopez on Wednesday afternoon. “We continue to be hard at work on securing the remaining deals that will form the backbone of the business plan that will support our reorganization. And specifically, what has been the focus of the company for the last month, has been negotiating new deals with Comcast, the NBA, and the NHL.”
Diamond’s counsel went on to say they believe it’s a matter of “days, not weeks” for these resolutions to be reached and acknowledged, absent success in these negotiations, that liquidation might be the next step.
While the prospect of Twins games again being broadcast on cable is encouraging, it is not likely to have a meaningful impact on the payroll situation that hangs like a dark cloud over the club’s roster maneuvers (unless you want to credit access on television for helping to drive ticket sales.)
However, a separate development from yesterday might** positively impact (but definitely not solve) the payroll constraints.
(**Editor’s Note: It almost definitely won’t, but one can wish)
Major League Baseball and the MLB Players’ Association announced they’d come to an agreement to modify the existing collective bargaining agreement to redirect MLB’s portion of the money collected from teams who spend above the luxury tax limit to teams who are losing television revenue (like the Minnesota Twins).
News: MLB and the MLBPA have agreed to change the CBA so that teams losing TV revenue can receive luxury-tax dollars — up to $15 million per affected club.
After months of negotiation, the MLBPA thinks the change will help teams spend more on players. https://t.co/stOQN94sfC
— Evan Drellich (@EvanDrellich) July 24, 2024
According to reporting by Evan Drellich of The Athletic, affected teams can receive up to $15 million of a “media disruption distribution” under the discretion of Commissioner Manfred, with a limit of $75 million of those payments leaguewide. That’s roughly half of the $150 million that is MLB’s projected share of the luxury penalties to be collected after this season. (For its part, the MLBPA allocates is share of these funds to player retirement accounts, which is expected to remain unchanged with this agreement.)
Drellich reports MLB approached the MLBPA about the idea early in the year and the union agreed after months of negotiations, ultimately concluding that it would result in teams spending more on players. According to the agreement, teams are required to use supplemental-fund money “in an effort to improve … performance on the field.”
It’s not clear when teams might receive these supplemental funds, but after the 2024 season might be a reasonable assumption given when luxury tax penalties are typically assessed.
If that’s correct, this news seems unlikely to impact the Twins’ trade deadline posture but could impact how they approach next winter’s transactions. At the same time, there remains significant uncertainty about the future television revenue environment, the impacts of which dwarf the scale of this supplement.
It’s also far from clear how the MLBPA will hold the owners and MLB’s feet to the fire to apply these funds to improving performance on the field, instead of padding their own coffers.
They say the best predictor of future behavior is relevant past behavior, in which case, the owners as a group (and especially those in smaller markets) have done few things to show they deserve any benefit of the doubt on this issue. Maybe we’ll be surprised, but I wouldn’t recommend holding your breath.
John writes for Twinkie Town, Twins Daily, and Pitcher List with an emphasis on analysis. He is a lifelong Twins fan and former college pitcher. Follow him on Twitter @JohnFoley_21.