The Rise and Fall of Regional Sports Networks

The Rise and Fall of Regional Sports Networks

In 1969, the landscape of sports broadcasting was forever altered with the introduction of the first TV channel dedicated to local sports coverage, inaugurated by a deal featuring the New York Knicks and Rangers. This concept blossomed throughout the subsequent decades, giving rise to the proliferation of Regional Sports Networks (RSNs). By the 1990s, these networks were enjoying widespread popularity, a trend that continued into the early 21st century. At their height in 2010, RSNs reached over 100 million households, becoming a staple of cable subscriptions.

However, the landscape of television consumption has undergone significant changes, particularly with the advent of cord-cutting. This shift, coupled with a declining interest among younger generations, has steadily eroded the once-thriving base of cable subscribers. While most cable, satellite, and live TV streaming services still feature RSNs, availability varies significantly across different providers. For instance, while fuboTV includes a selection of RSNs, they are not uniformly accessible across all regions. Conversely, platforms like Hulu, YouTube, and Sling TV have limited access to some of the more prominent RSN groups, including AT&T SportsNet and Bally Sports.

Bally Sports: A Case Study in Decline

Bally Sports Regional Networks, operated by Diamond Sports Group, serves as an illustrative example of the broader challenges facing RSNs. Providing coverage for 42 NBA, NHL, and MLB teams, the network has seen a drastic downturn in its fortunes. From April 2019 to July 2020 alone, cash flow projections plummeted from $1.5 billion to $750 million, signaling deep financial distress. This culminated in Diamond Sports Group filing for Chapter 11 bankruptcy and taking legal action against Sinclair for allegedly offloading insolvent assets onto them.

The ongoing uncertainty and financial instability of RSNs have incentivized teams to explore alternative broadcasting solutions. These include developing their channels or forging partnerships at the local level, strategies that may gain traction if the traditional RSN model continues to wane.

The Broader Picture: Sports Broadcasting in the Streaming Era

The current upheaval in sports broadcasting underscores a critical juncture, especially for leagues heavily reliant on RSN revenues. While globally popular leagues like the NBA and NFL remain prosperous, thanks to international interest and digital offerings such as NFL RedZone and NBA+, others find themselves at a crossroads. This transformation poses potential implications for team valuations, player salaries, and the overall structure of leagues dependent on broadcast revenues.

The Evolution of Pittsburgh Sports Broadcasting

A microcosm of the broader shifts in sports broadcasting can be observed in Pittsburgh's local sports media landscape. From the establishment of the Pirates Cable Network in 1986 to the present operations of SportsNet Pittsburgh in 2023, the trajectory of regional sports media in Pittsburgh mirrors the industry's fluctuating fortunes. Attempts by AT&T to offload its RSNs—amid disputes with providers like Dish Network—and the move by Warner Bros. Discovery towards Chapter 7 bankruptcy illustrate the volatility and enduring challenges facing RSNs.

Despite these challenges, SportsNet Pittsburgh continues to broadcast Pirates baseball and Penguins hockey alongside a range of local sports content, navigating the uncertainties that afflict the wider RSN landscape.

Future Outlook on Regional Sports Networks

The prevailing trend away from traditional cable towards streaming models perceived as more consumer-friendly signals a transformative period for RSNs. While team-owned networks in significant markets may withstand the changing tides, the future remains uncertain for many. As of October 27, 2023, the fate of over 36 teams tied to the bankrupt Bally Sports network hangs in the balance, emblematic of the broader existential challenge confronting RSNs.

Amidst these challenges, the sports broadcasting industry stands at a crossroads, with the potential for significant restructuring and innovation. The coming years will undoubtedly see the emergence of new models and strategies as stakeholders adapt to an evolving media landscape. In sum, while the decline of RSNs marks the end of an era, it may also herald the beginning of a new chapter in sports broadcasting, characterized by flexibility, accessibility, and a closer relationship between sports organizations and their fan bases.