Welcome back to The Varsity, my private email on the heroes and villains who run the sports media trade. Happy Derby Weekend to all who celebrate.

Before getting started, I want to highlight this fascinating Ben Strauss story about Stephen A. Smith, whose ESPN contract is expiring next year. ESPN’s management of this negotiation will certainly become a leitmotif—look it up, jocks—of the fall and winter. As Strauss notes, Stephen A. has been fixated on Pat McAfee’s deal, which pays the host $15 million to produce and star in his daily show, and make special appearances elsewhere.

Of course, it’s not an apples-to-apples comparison since McAfee launched to stardom outside of Bristol and was lured in to support its new streaming dreams. Stephen A., on the other hand, is a homegrown product—a New Yorker turned Philadelphia Inquirer journalist who came to stardom on the old Sports Reporters set that minted so many signature talents (Wilbon & Kornheiser, Albom, Lupica, Bob Ryan, etcetera) on the shoulders of Dick Schaap. Nevertheless, Stephen A. has ascended to ESPN’s Berman-Olbermann pantheon, and he’s not one to negotiate quietly. “I know what all the stars in media make,” Stephen A. said. “I stand to benefit from that.”

This jam-packed issue features lots of news surrounding my two current obsessions: the oscillating NBA media rights negotiations and Diamond Sports’ slow march out of bankruptcy. For full access to my reporting, and the rest of my all-star colleagues’ private emails, sign up here. If you are one of the scoundrels still forwarding this email to your colleagues, we’ll have no choice but to sign you up for Marchand’s Jazzercise class!

Let’s get to it…

Anyway, Zaz has no one to blame but himself. For two years, he’s signaled to the league that WBD didn’t need the NBA. Sports rights deals are about relationships, and top executives begin finessing the finer points at least a year before they actually set up meetings to hammer everything out. If Zaz was bluffing, it did not pan out.

1. Zaz vs. Roberts: Now that ESPN and Amazon have agreed on a framework for their deals with the NBA, I asked my sources for their predictions about the third package. Most believe that NBC will get it. On his stellar podcast, The Town, my partner Matt Belloni and Bill Simmons agreed that WBD will wind up on the outside looking in. “The economics here are lining up where Comcast will actually get this,” Matt said. “Zaslav is in just a horrible spot.” Simmons made a great point, too. “Comcast is the guy in your fantasy football draft who keeps bidding up the guys you like,” he said. He’s right, of course. Roberts infamously offered a stalking horse bid that prompted Bob Iger to spend $70+ billion on the non-sports-and-news assets of 21st Century Fox.

   I take their points, and yet I think WBD will pony up despite its unfortunate predicament and Comcast’s aggressive tactics. Putting aside Zaz’s bluster about not needing the NBA, WBD’s top sports executives clearly want to renew, and have been camped in New York all week trying to get a deal done. It’s also hard for a league to walk away from an incumbent, both sentimentally and structurally. Which leads me to note…

2. What happens to NBA TV… and Shaq, Kenny, and Sir Charles?: When Turner Sports signed its current NBA deal a decade ago, Turner housed NBA TV, League Pass, and NBA.com. For Turner, those relationships provided a lot of protection—if the NBA ever wanted to ditch TNT, a partner since the ’80s, it would be extraordinarily difficult to untangle those various properties. (Turner still provides content for NBA TV and NBA.com, though in ensuing years the league took over most of League Pass.) In fact, during the past two weeks, I’ve been repeatedly asked what will happen to NBA TV if the league accepts NBC’s bid. Given various changes in the media ecosystem, however, the league’s ability to unwind its NBA TV entanglement is now much, much easier than it’s ever been.

   First, NBA TV is not nearly as popular as it was a decade ago. It only reaches 36.3 million homes, per Nielsen, which is just 29 percent of the country. (MLB Network is only in 33 million homes, while NFL Network is in 50 million.) Much like regional sports networks, the league-owned networks have been gutted by cord-cutting. And while NBA TV still carries exclusive playoff games, it’s been relegated to digital tiers throughout the country, and doesn’t appear to be a factor in these media talks. The league also has more of a say in NBA League Pass than it did a decade ago, and that out-of-market package looks likely to move to Amazon (or another carrier) regardless of whether or not WBD renews its deal.

   Another popular question centers on what would happen to Inside the NBA, one of the best studio shows in television history. Sir Charles, Kenny, and Shaq all have outs in their WBD contracts if TNT doesn’t carry NBA games. But those contracts are not necessarily cut-and-dried. Barkley and Smith appear on other WBD shows, per their contracts. And the likelihood of all three heading to Amazon or NBC as one package appears slim, per sources.

3. ABC’s MNF micro-drama: Last year, the NFL irritated CBS, Fox, and NBC executives when it allowed Disney to simulcast almost every Monday Night Football game on both ESPN and ABC, the latter of which lost plenty of original programming due to the writers strike. This turned out to be a benefit for Disney: It added about $400 million of ad inventory in a crowded market, and Monday Night Football increased ratings by 29 percent—generating its largest audience since 2000.

   Given that performance, rival network executives worried that the NFL would repeat the favor. But sources say that Disney will instead revert to its current rights deal, which allows ABC to simulcast three or four games between Week 1 and Week 17, plus two games on the Saturday of Week 18. ABC will also have three exclusive games, as part of Monday night doubleheaders. “It’s still not great for us, but at least we can go to the market and say that there’s less broadcast inventory than last year,” one rival network executive told me. (The NFL has not said when it plans to release its schedule, but sources expect to see something by next Thursday.)

4. The cliff path (drink!): Bally Sports R.S.N.s went dark on Comcast systems yesterday morning after a short negotiation wherein neither side budged. Comcast’s Greg Rigdon did not move off his cliff path strategy, which would have immediately bumped the R.S.N.s to a digital tier. Meanwhile, Diamond Sports’ David Preschlack did not waver from his preferred glide path—his request to move the R.S.N.s to a digital tier over a period of a couple of years. Both sides were so entrenched in their positions that Comcast sent reporters emails saying that the R.S.N.s would be going dark hours before the signals were actually pulled.

   Alas, this will not be a short-term impasse. Twenty hours after the R.S.N.s went dark, the two sides had not talked, and no meetings had been scheduled. Diamond, of course, is focused on emerging from bankruptcy, and Comcast’s cliff path prerogative appears set in stone. The next big negotiation will arrive as the cable operator figures out what to do with its own NBC Sports R.S.N.s, which are not on Comcast’s digital tiers since their contracts have not expired yet. Bob Thompson, who used to run Fox’s R.S.N.s, offered a humorous tweet conveying the irony. Comcast, he noted, “could agree to re-open the deals and re-tier them anytime they like. Left pocket, right pocket.” (More on this below…)

5. Happy trails: Jeff Pash, the NFL’s general counsel, is leaving The Shield after 40 years, but has agreed to stay on board until the league finds a replacement. “For four decades, he has loyally and effectively represented the league as external and in-house legal and labor counsel,” Roger Goodell wrote in a memo announcing the move.

   Pash’s close relationship with Goodell, combined with his longevity in the league office, gave him more power than anyone outside the commissioner. Pash made a career of staying out of headlines, though he did manage the league’s labor negotiations and legal strategies, including with Deflategate. The move comes as the league is preparing for the Sunday Ticket trial this summer.

And yet, somehow, all is not lost. Over the past 24 hours, I’ve learned that Diamond has been tossed yet another lifeline to escape bankruptcy. Amazon, which invested $115 million in the R.S.N. company back in January, has told the NBA that it plans to negotiate on behalf of Diamond for a package of local streaming rights. If Amazon is able to secure a long-term deal for these rights, a distinct possibility, Diamond’s prospects to emerge from bankruptcy would increase materially.

Of course, Amazon and the NBA have already agreed on a larger package that includes the playoffs, regular-season games, and exclusive access to one night’s worth of regular season games per week. Amazon would carry all the games on its Prime service, most likely using production crews from the regional sports networks. Amazon also has shown a lot of interest in League Pass, though it hasn’t agreed on terms for the NBA’s out-of-market streaming package yet. For months, NBA executives told both Diamond and Amazon that they couldn’t contemplate local rights until the national (and international) issue was settled. Well… now it is.

It’s very much in Amazon’s interest to preserve Diamond, and its existing deals, as the company builds out the infrastructure of a local streaming business, bridging the gap to the future. In particular, back when Fox owned these assets, executives like Bob Thompson and Jeff Krolik staggered the rights deals for each team so that they wouldn’t come due at the same time. But if Diamond can’t come out of bankruptcy and winds down, all those rights would become available and the teams would be free to negotiate on the open market. Any money Amazon can shovel into the Diamond business now will ensure it maintains bargaining leverage over the teams, and certainly more than it could ever apply in a free-for-all, open market situation.

Also, let us not forget, Diamond’s regional sports networks still bring in a lot of revenue via cable affiliate fees and advertising, which Amazon can use to defray capex and opex investments in its local streaming endeavors. NBA team executives are also likely to welcome this new twist. Many have told me that they expect to profit off of Amazon’s ad business, which will tell them much more about who is watching what games and for how long. And Preschlack, meanwhile, will live to see another day.

“Thanks for the deeper dive on Women’s Sport Network and the current opportunity behind women’s sports, which are not being supported by infrastructure at the networks, with women’s basketball at ESPN being the outlier. Women’s golf is seeing that right now, with Nelly Korda on an absolutely transcendent winning streak, including the most recent major. NBC’s coverage has been abysmal at best and is missing a key opportunity to draft off Caitlin Clark mania and grow the LPGA platform. With the men’s side in a bit of chaos given the LIV split, it would be awesome to invest more resources and storytelling around the women’s game. But instead we get the most lackluster coverage, and the LPGA even has to pay to have ESPN do Thursday and Friday coverage. It is infuriating, especially as the sport is seeing a ton of growth in the female demographic.” —A finance executive

“Thought your piece on women’s sports and Sara Gotfredson as an industry expert was terrific. Sara is a real talent and doing great things!” —A former ESPN executive

“Love having you here at Puck. I used to read all your SBJ stuff as a baby banker in the sports and entertainment space and enjoyed the Marchand & Ourand pod. I always chuckle at the running gag of how you will sic Marchand on us if we forward an email.” —A finance executive

“A ‘defenestrate’ and a Marchand kidnapping… all before the halfway point of Item 1!!!” —A network executive

“What I love about your mention of the Orioles’ first win in 1988 is that I went to the game at Comiskey. I had landed my first real job in Chicago in 1986, and the group I hung with said, ‘Let’s go see the Sox Friday night. Guaranteed to be a win.’” —A former TV executive

“What was the Baltimore bar where you processed that O’s history?” —A Baltimore-based banker [Ed. note: I’ll answer that last one. It was the Original Sports Bar, which had just opened near the Inner Harbor.]