The Decline of Regional Sports Networks: A Comprehensive Analysis
In July 2013, after returning from baseball practice, I was eager to catch the Pittsburgh Pirates square off against the Chicago Cubs. My go-to destination? Channel 43 - Root Sports. Fast forward a decade, and the way we consume sports has transformed significantly, largely attributable to the decline of Regional Sports Networks (RSNs).
### The Rise and Fall of Regional Sports Networks
The inception of RSNs dates back to 1969 with a 125-game deal involving the New York Knicks and Rangers, marking the beginning of sports-oriented TV channels dedicated to local markets or geographic areas. By the 1990s, RSNs surged into the sports scene, reaching their zenith in 2010 when over 100 million households were connected to cable. However, this trend has seen a steady decline since, exacerbated by cord-cutting and the disinterest of younger generations in cable bundles.
Presently, while most cable, satellite, and live TV streaming services offer RSNs, not every network is accessible through every provider. For instance, fuboTV proffers a variety of RSNs yet this assortment is moot if the relevant networks aren't available in your region. Moreover, streaming giants like Hulu, YouTube, and Sling TV lack popular RSN groups including AT&T SportsNet and Bally Sports.
### Bally Sports: A Case Study in Decline
The downfall of Bally Sports Regional Network, under Diamond Sports Group, delineates how rapidly the business has deteriorated. At the time of its acquisition in 2019, Bally Sports boasted coverage of 42 NBA, NHL, and MLB teams. Yet, within a short span, cash flow projections plummeted from $1.5 billion in April 2019 to $750 million by July 2020. Presently, Diamond Sports Group is navigating Chapter 11 bankruptcy and has taken legal action against Sinclair, accusing it of offloading "insolvent" assets.
This has inevitably led to teams creating their own broadcasting avenues (e.g., YES Network for the Yankees), leagues taking more direct control (e.g., Padres with MLB), or partnering with local market teams (e.g., the Suns acquiring rights from Bally). The decline in RSNs can largely be attributed to their reliance on fees from all cable subscribers, a model disrupted by the shift to streaming and more direct-to-consumer approaches.
### The Broader Picture: Sports Broadcasting in the Streaming Era
While the NBA and NFL continue to thrive due to global interest and unique offerings like NFL RedZone and NBA+, the same cannot be said for other sports leagues. The shift away from traditional broadcasting poses significant threats to leagues heavily reliant on RSNs, which sometimes account for more than a third of a team's annual operating revenue. This could potentially impact team valuations, player salaries, and the very structure of leagues.
### The Evolution of Pittsburgh Sports Broadcasting
The journey through Pittsburgh's regional sports broadcasting history offers a microcosm of the broader industry challenges. From the Pirates Cable Network in 1986 to AT&T SportsNet Pittsburgh and eventually SportsNet Pittsburgh in 2023, the landscape has been anything but stable. The attempt by AT&T to sell its regional sports networks, disputes with service providers like Dish Network, and the overarching move towards Chapter 7 bankruptcy by Warner Bros. Discovery underscore the precarious state of RSNs.
SportsNet Pittsburgh now airs Pirates baseball, Penguins hockey, alongside a variety of local sports content. However, the uncertainty looms large: what happens if RSNs continue to dwindle and technological giants choose not to step in?
### Future Outlook on Regional Sports Networks
The decline in RSNs signals a transformation in how viewers connect with sports, shifting away from a model that's increasingly seen as unfriendly and outdated. Certain team-owned RSNs in major markets might survive, such as NESN in Boston and YES Network in New York. However, the survival of even these stalwarts is uncertain as the number of cable homes drops.
As of October 27, 2023, the fate of over 36 teams entangled with the bankrupt Bally Sports network remains hanging in the balance. The sports broadcasting world is keenly watching to see what emerges from the current predicament, especially concerning the potential interventions by technology giants.
The changing dynamics of sports broadcasting present a complex scenario fraught with challenges and opportunities. As the industry navigates this transition, stakeholders from leagues to teams, broadcasters to fans, are keenly watching, anticipating the next play in this evolving game.
