By: Jonathan Tunney
November 25, 2024
Photo Credit: TVTechnology
For generations of sports fans, regional sports networks (RSNs) have been the primary viewing medium for all of their favorite sports broadcasts. These networks enable fans to watch every single game of their local major league sports teams play from the comfort of their living room. These networks are also known for broadcasting lesser-known sports with regional appeal, such as deep-sea fishing in Florida and snowmobiling in Michigan. For decades, these networks were the beneficiaries of incredibly profitable business models built on long-term deals with major cable providers, providing a steady revenue stream with consistent advertising slots to fill. Unfortunately for RSNs, the rise of streaming services, the downfall of cable, and shifting consumer preferences have drastically damaged the effectiveness of this business model, putting these networks’ futures in jeopardy.
RSNs, such as Bally Sports and Comcast Sportsnet, were built on the idea of exclusive broadcast rights. With fewer large network deals, streaming deals, and direct-to-consumer options from leagues themselves, RSNs in the past could guarantee exclusive broadcasting rights to nearly all major sports games in a given market – except a few nationally aired TV games per league. Cable providers were willing to pay a high price for the consistent and expansive viewership these games provided, with many RSNs reaching massive valuations. Sinclair Broadcast Network paid a reported $9.6B for 21 Fox Sports regional sports networks in 2019 (Turner 2019).
Looking back, this was a bad investment. Cable subscriptions have continued to decline, with consumer preferences shifting towards cord-cutting and streaming services. In addition to this, streaming services and direct-to-consumer offerings from leagues themselves have eroded the exclusivity of regional sports network broadcasts. Streaming services that offer some form of live sports include Hulu, Peacock, Netflix, Max, ESPN+, and YouTube TV. Direct-to-consumer offerings such as NBA League Pass and MLB.TV ensure that super fans are always able to watch every game. These competitors and shifting consumer preferences have combined to reduce RSN’s market share of sports broadcasts greatly, reducing their value in an incredibly short amount of time.
Unfortunately for the average consumer, the decline of RSNs will likely lead to a more expensive and harder-to-navigate local sports viewing experience, at least in the short term. In the past, RSNs were featured as a part of basic cable packages. This gave nearly every consumer access to their local sports teams while also spreading the cost of RSNs across a large customer base. Now, consumers will either have to spend more money across numerous different platforms (as many already are forced to do) or pay hefty subscription fees from direct-to-consumer offerings such as NFL Sunday Ticket, which is priced at $264 for the remaining half-season of games this season.
On the bright side, direct-to-consumer offerings have been experimenting with flexible pricing tiers, showing they are open to blending accessibility and profitability. Additionally, streaming services have already begun to introduce bundling options to lessen the cost for consumers. While these options provide hope for consumers in the short term, they will still be faced with increased prices in the short term.
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