The Emergence and Decline of Regional Sports Networks
In 1969, a pioneering venture commenced with a deal between the New York Knicks and Rangers, birthing the first sports-oriented TV channel dedicated exclusively to a local market. This marked the genesis of what would become known as Regional Sports Networks (RSNs). By the 1990s, RSNs had burgeoned in popularity, culminating in a peak in 2010 when over 100 million American households were connected to cable television.
However, the past decade has seen a dramatic shift. The number of households subscribing to cable has been on a steady decline, fueled by cord-cutting phenomena and a marked decrease in interest among younger generations. Most cable, satellite, and live TV streaming services continue to offer RSNs, yet not all networks are accessible on every platform. Services like fuboTV offer a variety of RSNs, albeit with regional limitations. Conversely, platforms such as Hulu, YouTube TV, and Sling TV find themselves without access to prominent RSN groups like AT&T SportsNet and Bally Sports, signalling a significant churn in the industry.
The Struggles of Bally Sports Regional Network
The difficulties faced by RSNs are epitomized by the Bally Sports Regional Network, operated under the aegis of Diamond Sports Group, which covers 42 teams across the NBA, NHL, and MLB. The network witnessed its cash flow projections halve, plummeting from $1.5 billion in April 2019 to $750 million by July 2020. The financial strain ultimately led Diamond Sports Group to file for Chapter 11 bankruptcy and lodge a lawsuit against Sinclair for allegedly offloading "insolvent" assets onto them.
In the wake of these challenges, teams have begun to explore alternative broadcasting avenues, including the creation of their own channels or forging local partnerships, as they navigate the decline of traditional RSNs. This decline is largely attributed to the business model of RSNs, which relies on levying fees from all cable subscribers — a model rendered increasingly unsustainable by the advent of streaming services.
Adapting to the Streaming Era
Despite the tumultuous landscape for RSNs, the NBA and NFL continue to thrive, buoyed by global interest and innovative offerings such as NFL RedZone and NBA+, which cater to the evolving consumer preferences. However, the shift away from traditional broadcasting models poses a significant threat to leagues that heavily rely on RSNs for revenue, potentially impacting team valuations, player salaries, and the structures of the leagues themselves.
The evolution of sports broadcasting is notably illustrated by the case of Pittsburgh. From the Pirates Cable Network in 1986 to SportsNet Pittsburgh in 2023, the region's sports broadcasting history has witnessed considerable advancements. Amidst attempts by AT&T to sell its RSNs and disputes with providers like Dish Network, the instability of RSNs was further underscored by Warner Bros. Discovery moving towards a Chapter 7 bankruptcy. Nonetheless, SportsNet Pittsburgh continues to broadcast Pirates baseball, Penguins hockey, and local sports content, navigating through the prevailing uncertainty.
Looking Ahead: The Future of Regional Sports Networks
The ongoing decline of RSNs mirrors a broader shift in consumer behavior, away from traditional cable and towards models perceived as more consumer-friendly. While team-owned RSNs in major markets may continue to operate, their future remains precarious amid dwindling cable households. As of October 27, 2023, the fate of over 36 teams tied to the bankrupt Bally Sports network hangs in the balance, casting a shadow of uncertainty over the landscape.
The sports broadcasting industry remains at a critical juncture, facing both challenges and opportunities in equal measure. What emerges from this period of upheaval could redefine the landscape of sports broadcasting for generations to come, marking either the end of an era or the dawn of a new chapter in the evolution of sports media.