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Forbes did a write up on RSNs (Regional Sports Networks). In the last set of comments, it was noted that “the NHL will just take the rights back and put them on their own network…. Here’s the issue, and the MLB and NBA in AZ have dealt with it. Yes, they got the rights back from Bally. This is a quote from the article:
“What we are seeing is that many teams would prefer to get a new broadcast and online DTC partner, or go it alone. The most recent news on the Diamond front is that Diamond Sports Group was unable to renegotiate a much lower price on the remainder of its 20-year $1.5 billion contract with Major League Baseballs’ Arizona Diamondbacks for local rights for its RSN.
On Tuesday, the Diamondbacks will play the Atlanta Braves at Atlanta’s Truist Park and the game will be shown on a new RSN called MLB Arizona Diamondbacks which has carriage with Charter Communications CHTR -0.2%, Comcast CMCSA -0.7%, Cox, DIRECTV and Fubo. This new model will grow subscribers dramatically, the Diamondbacks will be seen in 4.7 million homes vs. the 930K subscribers to Bally Sports Arizona where the Diamondbacks previously aired.…
DTC means direct to consumer. That is when you subscribe to a service without a “middle man…. IE, if you go cable, your revenue is shared with the other services in that package. If you have your own app, that money goes right to the team and the broadcast partner. The line that really upsets me (and why it’s hard to get honest numbers… is ‘the Diamondbacks will be seen in 4.7 million homes vs. 930k.’ If the outlet were honest, it would say that the team will be available to that many houses as the network hard Charter, Comcast, Cox, DirecTV and Fubo all doing the broadcast vs the 930k subs to Bally Sports. If you are paying for a local sports package, it’s a conscious decision that extra money goes to the provider for paywall content. That was 930k people in this case. Of the 4.7 who now have 5 entities and vastly different pay scales.
I’ll further the point. Here is another quote from the article:
“The San Diego Padres also bid adieu to Diamond Sports Group and, as in that case, subscribers were given the games for free online for a short period of time (this time at dbacks.com/watch) and then transitioned to a MLB.TV local feed for a $19.95/month fee. This is separate from the out-of-market MLB.TV channel. MLB boasted that since May 31 when it took over the Padres games, reach expanded by a hefty 189% and viewership leading into last week’s All-Star break jumped by 14%.…
Do you see it? Some people stop reading at the growth reach of 189%. The actual growth was 14%. Meaning, of that extra 189% availability only 14% are watching with no numbers mentioning the previous numbers. They could be quite similar. Also read, the local team has a $20 per month sub that’s NOT included in the MLB.TV subscription fee. So you’ll be paying $20 plus whatever MLB.TV charges.
Here’s the good part. If you just went with the $20 local package, it eliminates blackouts. You can then decide if you can cut your cable/satellite and how much you want to pay to watch the other teams. These are streamed services, as most DTC in the current market and going forward will be.
So far Bally’s has lost the AZ market (except the ‘yotes), the Padres, teams around Chicago (who had for 5 plus years built up a TV platform. They’re also making WNBA games available over antenna, free for customers in hopes they can grow the game. Currently it averages 300k viewers and 5k live (which looks a little empty). Look up “fan kicked out of WNBA game for sleeping…. It actually hit the news cycle.
My hope is for a DTC Red Wings model that will remove all blackouts. I think Detroit is a market that could pull it off as ESPN has announced price increases for the fall. Sports Betting looks to be playing a part in some of the new options (as a philly fan correctly pointed out).
My other hope is that teams that lose money year after year have to repay some of that via the owner. The players are paying enough in escrow at this point. My proposal is 5 straight losing seasons is a tier 1 fine, 6 is a tier 2, and 7 is a required partnership with a reduced expansion fee that counts as HRR so the players can get back some escrow. Let me know your thoughts.