The way fans watch Cardinals and Blues games soon could see significant change, as a recent report by Bloomberg says that the company that owns their regional television rights is heading toward bankruptcy court for restructuring of its debt. It also could significantly impact the rights fees teams receive.

The Cards’ and Blues’ local game telecasts are on Bally Sports Midwest, one of 19 Bally regional sports networks nationwide. They are under the umbrella of Diamond Sports Group, which is part of the Sinclair Broadcasting conglomerate that has deals with MLB, NHL and NBA teams to televise games.

Sinclair paid $10.6 billion to Disney in 2019 when it bought what at the time were called Fox Sports networks. Sports Pro, which covers athletics-related business matters, reports the networks now are worth approximately $3 billion.

The Bloomberg report said that Sinclair is expected to fail to make $140 million in interest payments due soon, which would be “kickstarting a 30-day grace period” in which it could try to renegotiate deals or file for bankruptcy. That could begin as early as this week.

Possible developments range from the status quo, with Cardinals and Blues contests continuing to be available on the cable, satellite and streaming services on which they currently appear, or to a chaotic situation in which there could be a free-for-all to see where they land. The possibility exists that teams would gain control of the telecasts but lose rights fees. More streaming seems an eventual outcome, and elimination of some territorial blackout restrictions seems to be inevitable.

“Our strong preference would be for the (regional sports networks) to be able to fulfill the agreements they signed with the clubs. However, we need to be prepared if (they) are unable to do so,” Front Office Sports quoted Noah Garden, MLB’s chief revenue officer, as saying. “This is a situation we have been monitoring for a long time. We have been contingency planning to ensure that no matter what happens with the (regionals), fans will be able to continue watching their favorite teams in their local market.”

Although the Sinclair-Diamond regionals recently were added by FuboTV, the networks have not been able to reach carriage agreements with some other major programming providers — including Dish Network, Hulu Live, Sling TV and YouTube TV. MLB commissioner Rob Manfred has touched on the subject several times in recent months.

“I think the key for us is the development of direct-to-consumer products to increase our reach,” he has said. “The biggest problem for us on the (regional networks) side is that, even within the cable bundle — particularly with the Diamond subsidiary — is that their reach, within the bundle, is not what it used to be. It’s important for us to develop digital products that allow us to get to our fans in a frictionless way. That’s really your future.”

The financial distress is a direct result of the sharp decline of the traditional cable/satellite TV packages that were the base model for regional sports networks such as the Bally outlets, as many customers have “cut the cord” in favor of often-cheaper streaming services. In 2010, 91% of U.S. homes purchased programming from a cable, satellite or telephone company. By 2021, that figure had tumbled to 60% and continues to fall while streaming has grown.

The issue was discussed last week at a meeting of MLB owners.

“I think you should assume that if Diamond doesn’t broadcast, we’ll be in a position to step in,” Manfred said Thursday. “Our goal would be to make games available not only within the traditional cable bundle but on the digital side, as well.

“What we do is largely dependent on how Diamond and the creditors play their cards, what they decide to do,” he added. “Our No. 1 goal in terms of preparations is that if for some reason Diamond isn’t broadcasting, that we want to be in a position to make sure our fans are going to get their games.”

Bally Sports Midwest officials referred questions about the matter to a spokesperson at the corporate level, who declined comment.

There is a major financial stake for teams, especially ones such as the Cardinals — who are in the middle of a 15-year, $1.1 billion deal they have for their TV/streaming rights. That’s an average of just over $73.3 million annually and this year is expected approach $70 million, rising to $80 million per season over the last five years of the contract that runs through the 2032 season. In addition, the team has a stake in the company that is said to be in the 30%-40% range.

The sets up the team to “share in risk, too,” a team executive has said.

Cardinals chairman Bill DeWitt Jr. said that BSM’s parent company’s uncertain status did not influence the club’s spending this year.

“It’s a concern and a fluid situation, there’s no question about it,” he said. “Something is going to happen sooner or rather than later. It’s a big part of our revenue stream. We have nice rights fees. The (regional sports networks) model is at risk.

“We’re operating like, no, it’s going to stay, but the reality is there’s going to be change.”

He added that what happens in this situation could shape spending in the years ahead.

“In a not too long period of time it’s going to be a different delivery system where everyone will have an opportunity to watch Cardinals baseball,” DeWitt Jr. said. “It’s complicated. We’re hoping for the best because it’s a big part of the revenue. ... Ideally, you’d make Cardinal baseball available particularly in our broader market (to) those who would like to see it. It builds our fan base.”

Five of Bally’s 14 MLB regionals, including the Kansas City area, began selling those telecasts directly to consumers last season. No middleman, such as a cable or satellite service, is needed to access them. However, that model has not been implemented for Cardinals games and as of now it is not in place for the coming season.

The National Hockey League is less dependent on Sinclair-Diamond than is Major League Baseball, something NHL commissioner Gary Bettman addressed at a recent news conference.

“The impact to the league based on how much the Sinclair regionals pay is not very large relative to us approaching almost $6 billion in revenues,” he said. “However, for the clubs involved, obviously it will have a serious impact. We’re in regular touch with the people running the Sinclair regionals. Now they are suggesting that there isn’t an imminent financial crisis, that they’re trying to reorganize their business and move forward effectively, and that the clubs will continue to get paid and the games will continue to be distributed.

“But we are obviously monitoring it very closely, and exploring, at least theoretically what the options may be in the event the worst were to happen. It’s clear that the regional sports business in this era of cord cutting and cord severing is one that is facing some challenges with streaming and other alternatives. There will be an evolution of how games are distributed. And that’s something obviously, we’re very focused on. ... Nothing is imminent, and the solution may not necessarily involve bankruptcy.”

Any significant impact on the Blues would not be expected this season, as they wrap up in mid-April. Even if they do make the playoffs, Bally Sports Midwest would have no coverage beyond the first round. The team nonetheless is concerned.

“The migration of sports fans from cable TV packages to streaming services has clearly been an inevitable trend that we know will force a seismic shift in the business model of all sports teams engaged with local broadcast partners,” Blues president and CEO said Chris Zimmerman said. “Finding a workable alternative to the current model would require close collaboration between the leagues and any impacted teams so we appreciate that the NHL is fully engaged on this issue.

“The Blues are fortunate that the strength of our fan base means we annually rank among the top American franchises in the NHL for average viewing audiences and this season has been no different.”

MLB is not standing still. It has hired Billy Chambers to oversee distribution of local media rights. Chambers has a vast working knowledge of the situation. He was the chief financial officer and chief operations officer of the regional sports networks that Sinclair bought and was involved in the business aspects of the sale and then worked for Sinclair.

“Billy is an important addition to Major League Baseball and will play an integral role in how we navigate the rapidly evolving local media landscape in the future,” Manfred said in a statement when Chambers’ hiring was announced last month.

MLB and Diamond are said to be in a tense relationship currently, with Diamond (Bally) wanting to sell packages that include weekend-only games or just the last few innings of contests, per a report in Sports Business Journal. That story said “MLB has not granted other media companies those rights, and sources said it is not likely to start with a distressed RSN group.”

Cardinals president Bill DeWitt III summed things up at the team’s Winter Warm-up event last month.

“The bottom line is the overall economics of (regional sports networks) have been in decline and that’s concerning to us all and all of sports,” he said. “It’s something we have to be cognizant of.”

Derrick Goold and Jim Thomas of the Post-Dispatch staff contributed to this report.