The Reds recently severed ties with Diamond Sports Group and will go into 2025 with MLB handling their broadcasts. The club’s chief operating officer and chief financial officer Doug Healy spoke with Mark Sheldon of MLB.com about all the changes, most notably stating that there’s no payroll reduction coming.
“We will maintain payroll levels at or above 2024,” Healy said. “And we will continue to give Nick Krall, Terry Francona and the entire Reds baseball operations the resources they need to field a championship caliber team at the major league level.”
That’s a notable development for the Reds and their fans as it was fair to wonder if a payroll drop was coming. As the regional sports network (RSN) model is decaying amid cord cutting, many clubs have reduced or plan to reduce spending. The Padres went from a $249MM payroll in 2023 to just a $165MM figure in 2024, per Cot’s Baseball Contracts. The Twins went from $154MM to $127MM. The Cardinals and Rangers are reportedly looking to scale back in 2025.
As of a couple of years ago, all of those clubs had deals with Diamond, just like the Reds. Diamond dropped the Padres in 2023 as part of their bankruptcy proceedings, leading MLB to step in and take over. The Twins struck a new deal for 2024 but with reduced fees. For 2025, they will be following the Padres in having the league take over. The Cardinals are still going forward with Diamond next year, though with the fees reportedly about 23% below the prior contract. The Rangers are looking into creating their own streaming service, as opposed to going with the league, but they won’t be back with Diamond.
The Reds are now following the Padres, Twins and other clubs in going with the league-run broadcasts. While the direct-to-consumer model cuts out the RSN middleman, it does require more active uptake than the cable model. Many people over the years have ordered cable packages that included these RSNs, even if they didn’t intend to watch much or any baseball. That gave MLB clubs a source of passive income that won’t be a part of streaming services.
Reportedly, the Reds were getting $60MM annually as part of their deal with Diamond. It’s unclear how much they can expect to receive in 2025 with this new paradigm, but it seems fair to expect that it will be less than that number.
Regardless, that loss of revenue doesn’t seem to be leading to payroll cuts, assuming that Healy can be taken at his word. That’s surely nice news for fans of the club as well as president of baseball operations Nick Krall. The Reds showed some encouraging signs in 2023, promoting a large number of prospects to the majors. That created some optimism for 2024 and the front office tried to spend some money in bolstering the roster, giving eight-figure deals to Jeimer Candelario, Nick Martinez, Frankie Montas and Emilio Pagán.
Unfortunately, the Reds were bit hard by the injury bug this past season, with most of the players on their roster missing some or all of the campaign. The result was a lackluster 77-85 season that saw them fall well short of a postseason berth. Krall and his staff are now going to be tasked with getting the train back on the tracks in 2025. A payroll cut would have made that more challenging, but it appears that won’t be something he has to deal with.
RosterResource projects the club for $79MM of spending in 2025, which is $11MM shy of their $90MM mark that Cot’s has for Opening Day 2024. The 2025 number doesn’t account for Martinez. The club gave him a $21.05MM qualifying offer, with November 19 being the date for him to accept or decline. Perhaps he will take it or maybe he and the club can work out a longer deal with a lower average annual value, though there will be more clarity in the coming days.
Assuming Martinez is back on the roster in some way, the club won’t have a ton of wiggle room relative to last year’s levels. A few non-tenders of their arbitration-eligible players could make some more space but they might require a payroll bump to be able to make any significant moves. It seems as though that might actually possible, which should count as at least mildly good news, as many other clubs in this situation have gone in the other direction.