Illustration: Sarah Grillo/Axios
Executives informed Axios that the leaders of prominent national networks are increasingly interested in acquiring local sports rights for their streaming and broadcast offerings. Meanwhile, both the NBA and MLB are exploring options to nationalize their local rights.
Why it matters: For many years, consumers accepted pricey cable bundles filled with regional sports networks (RSNs) even if they didn’t watch them. However, with the rise of cord-cutting, this model seems unsustainable.
- Transitioning to a national model for rights might be essential for long-term viability.
The big picture: Teams from the NBA and NHL that are departing from their RSNs have chosen a mixed strategy involving traditional broadcast stations and streaming services, accepting lower revenue in an effort to engage a broader audience.
- This shift has enabled local broadcasting leaders like Scripps and Gray TV to vie for sports rights.
- As teams establish their own local streaming agreements to supplement their newly acquired broadcast rights, league and network officials are beginning to consider opportunities for national streaming packages that could be tailored to local markets.
Driving the news: Paramount Global co-CEO George Cheeks remarked at the recent IMG and RedBird summit in London that “We’re in the local station business, and a lot of our strategy has shifted to some combination of DTC [direct-to-consumer streaming] and local stations.”
- Cheeks added, “We view this as a significant opportunity for our stations and believe it’s a critical aspect of our future events.”
- Jon Miller, a longtime NBC Sports executive, anticipates that teams will need to shift their rights to more over-the-air platforms or create their own direct-to-consumer streaming services.
- He advised that all stakeholders, from leagues and teams to players, must prepare to “tighten their belts” as the lucrative RSN model faces challenges.
Zoom in: ESPN chair Jimmy Pitaro, speaking to media last month at the network’s headquarters in Bristol, Connecticut, expressed interest in creating a national streaming package for MLB, akin to the offerings for the NHL on ESPN+.
- He stated, “If Major League Baseball can coordinate a group of teams, we would be eager to meet with [MLB executives] Rob [Manfred], Noah [Garden], and Kenny [Gersh] to negotiate a larger, simpler deal rather than managing individual team contracts,” emphasizing that team-specific agreements are also a possibility.
- While the rights might not necessarily be channeled through ESPN’s upcoming streaming service, tentatively named Flagship, Pitaro indicated that ESPN believes Flagship “should play a role in the overall solution.”
- Additionally, ESPN has collaborations with NESN in Boston and Monumental in Washington, D.C., allowing subscribers from those RSNs to access games directly through the ESPN app.
Zoom out: Leagues are beginning to recognize the necessity for changes in distribution, though these adjustments will come with challenges.
- NBA commissioner Adam Silver mentioned to reporters last week that the league will spend the next six months reviewing their teams’ local television situations, suggesting that streaming will likely play a more prominent role in the future.
- To support the financially struggling RSN group Diamond Sports, which manages rights for 13 NBA teams, Silver noted that…
- They charged “significantly” lower fees. “It’s like having a broken RSN model,” he stated.
- On the other hand, MLB has consistently maintained that the RSN model is beyond repair. ”We have a chance to expand the national presence of our sport,” MLB commissioner Manfred remarked during a talk at a CNBC conference last week.
What we’re monitoring: The speed at which leagues can reform their local rights will hinge on Diamond’s ability to successfully exit bankruptcy later this year.
- The RSN group is the largest entity holding local team rights. Despite shedding a few since filing for bankruptcy last year, Diamond retains the rights to 22 teams in the NBA and NHL and is contracted with nine MLB teams for the upcoming season.
- If Diamond fails to emerge from bankruptcy, all these teams would become free agents next year. Recently, it renegotiated its agreement with creditors to continue operating through the upcoming NBA and NHL seasons.
- Initially, Amazon agreed to invest $115 million in Diamond but has since backed out of this arrangement, adding uncertainty to Diamond’s future.
Friction point: It will be challenging to persuade large-market teams, many of which own their RSNs and are profitable, to combine their rights with others and distribute revenue.
- James Dolan, owner of the New York Knicks and Rangers, criticized the NBA’s new television deal for diminishing the exclusivity of local games.
- Some of these major-market teams have created their own streaming platforms to capture viewers who have cut the cord.
- Subscription Fatigue: As cable prices soar, consumers are cutting the cord and seeking more affordable alternatives.
- Streaming Services: Platforms like ESPN+, Peacock, and Amazon Prime Video offer a range of sports without the need for cable subscriptions.
- Changing Viewing Habits: Younger audiences prefer on-demand content over traditional broadcasts, prompting sports leagues to adjust their distribution strategies.
- MLB’s MLB.tv: Major League Baseball offers streaming packages allowing fans to watch games without regional restrictions.
- NHL’s partnership with ESPN: The NHL has collaborated with ESPN to provide national coverage, making games more accessible to fans.
- NFL’s digital expansion: The National Football League has embraced streaming through partnerships with platforms like Amazon Prime for Thursday Night Football.
- Increased Accessibility: Fans can now watch local teams without needing a cable subscription tied to an RSN.
- Wider Audience Reach: National platforms can attract a more extensive viewer base, boosting ratings and advertising revenue.
- Enhanced Fan Engagement: With easy access to games, fans are more likely to engage with teams through social media and other digital channels.
- Research Streaming Options: Explore various streaming services to find the best package that includes your favorite local sports teams.
- Take Advantage of Free Trials: Many streaming services offer free trials. Utilize them to test the quality and reliability of the streaming before committing.
- Stay Updated on Broadcast Rights: Keep an eye on announcements regarding local and national sports broadcasting rights to ensure you don’t miss out on games.
- Increased Competition: More streaming platforms will vie for local sports rights, resulting in improved offerings for fans.
- Innovations in Technology: Advances in technology may lead to enhanced viewing experiences, including augmented reality features and interactive content.
- Potential Regulatory Changes: As the landscape shifts, potential changes in regulations regarding sports broadcasting may further alter how local sports rights are distributed.
The bottom line: Although RSNs may encounter challenges due to cord-cutting, the audience’s appetite for live sports has reached unprecedented levels. The key lies in discovering how to capitalize on this enthusiasm in the streaming age.
Local Sports Rights in the Streaming Era: The Shift from RSNs to Nationalization
The sports broadcasting landscape is undergoing a transformative shift as traditional regional sports networks (RSNs) face challenges due to the rise of streaming services. With more fans seeking online access to local sports, the dynamics of local sports rights are changing. This article explores the implications of this transition, the benefits of nationalization, and practical tips for fans navigating this evolving sports media landscape.
The Decline of RSNs
Regional sports networks have long been a staple for local sports fans, providing coverage of their favorite teams and sports. However, several factors are contributing to the decline of RSNs:
The Rise of Nationalization
The shift from RSNs to nationalization refers to the trend of consolidating local sports rights under broader, nationally accessible platforms. This transition is driven by the need to meet changing consumer demands and enhance the reach of local sports content. Some significant developments include:
Major League Initiatives
Sports leagues are increasingly taking control of their broadcasting rights to adapt to the streaming era:
Impact on Viewership
This nationalization trend has significant implications for viewership:
Benefits of Streaming for Local Sports Fans
As local sports rights transition to streaming platforms, fans can enjoy several benefits:
Cost-Effectiveness
Streaming services typically offer cheaper subscription packages compared to traditional cable, providing fans with a more economical way to watch local sports.
Flexibility and Convenience
Fans can watch games on various devices, including smartphones, tablets, and smart TVs, allowing them to enjoy live sports from anywhere.
Enhanced Viewing Experience
Streaming platforms often include features like multiple camera angles, real-time statistics, and the ability to rewind or pause live action, enhancing the overall viewing experience.
Practical Tips for Fans
Navigating the transition from RSNs to streaming can be challenging. Here are some practical tips for fans:
Case Studies: Successful Transitions
Example 1: NBA League Pass
The NBA has effectively embraced streaming through its League Pass service, allowing fans to watch games live without regional restrictions. This move has expanded the NBA’s audience significantly, particularly among younger viewers who prefer streaming over traditional cable.
Example 2: NFL Game Pass
The NFL’s Game Pass service enables fans to stream games live or catch up on replays. This shift has helped the NFL maintain its status as America’s most popular sport by making games accessible to a broader audience.
First-Hand Experiences: Fans Share Their Stories
Fans across the country are sharing their experiences as they transition from RSNs to streaming services:
“Switching to streaming has changed how I watch my local team. I can now catch every game on my tablet without worrying about cable prices!”
“I love having the flexibility to choose which game to watch on any device. It feels like I have a front-row seat to every match!”
Table: Comparison of Streaming Services Offering Local Sports
| Streaming Service | Local Sports Teams Available | Monthly Subscription Fee |
|---|---|---|
| ESPN+ | NHL, MLS, UFC | $9.99 |
| fuboTV | NFL, MLB, NBA | $64.99 |
| Hulu + Live TV | NFL, NBA, NHL | $69.99 |
| Paramount+ | NFL, MLS | $5.99 |
The Future of Local Sports Rights
As we look ahead, the future of local sports rights in the streaming era is likely to continue evolving:
Final Thoughts
The transition from regional sports networks to national streaming platforms is reshaping how fans access and engage with local sports. As this shift continues, the benefits for fans are clear: cost-effectiveness, flexibility, and an enhanced viewing experience. By staying informed and proactive, sports enthusiasts can reap the rewards of this exciting new era in sports broadcasting.
