Amazon, ESPN Eye Local Sports Rights as RSNs Continue to Falter
Amazon and ESPN are both showing interest in the acquisition of more local rights.
The collapse of regional sports networks (RSNs) could have mixed results for fans. On the one hand, local games might become even harder to find, especially if they spread across more than one outlet as national sports rights continue to do. On the other, viewers may not have to buy into higher-priced pay-TV plans to watch them soon. Amazon and ESPN both have their eye on picking up RSN streaming rights in the near future, seeing a golden opportunity as bigger RSN providers like Diamond Sports Group (DSG) find themselves on the brink of oblivion.
Key Details:
- Amazon surprised observers with reports that it was near a deal to broadcast Bally Sports RSNs even after pulling an investment offer.
- ESPN has shown an interest in acquiring local rights for its new streamer as well.
- Many teams have decided to opt for local broadcast channels as RSNs fall.
It’s not just Diamond that has had struggles in keeping its RSN business afloat. Warner Bros. Discovery thought the task so difficult that it simply gave up its RSNs altogether, sending the local broadcast rights held by their old AT&T SportsNet channels back to their respective teams and closing the channels down in 2023.
As DSG has tried to keep itself afloat through a sometimes-tortured bankruptcy process, it has let more than one team go its own way, sacrificing teams like the Arizona Diamondbacks, Florida Panthers, New Orleans Pelicans, and others to try to save the whole. The company is now looking toward a confirmation hearing in November that may allow it to put its reorganization plan to the test and exit bankruptcy.
Throughout the process, Amazon and ESPN have watched and waited for a chance to step in. Amazon actually promised to invest in Diamond Sports Group in January, before reportedly pulling that deal off the table in late August. On Thursday, however, new reports emerged that, in spite of the investing reversal, Amazon is still working on a deal with Diamond to stream Bally Sports channels in their local markets.
As far back as 2022, reports indicated that Amazon wanted to acquire enough sports to create its own standalone sports streaming app. The idea seemed less feasible at the time, when Prime Video had “Thursday Night Football” to its name but little else. Now, the service has a package of WNBA rights, NWSL soccer, and an incoming package of NBA games — as long as the league quashes a WBD lawsuit to try to reclaim those rights. Getting the right to distribute Bally Sports channels would be another quality addition to that inventory.
ESPN Goes Local
ESPN is also looking to add local sports rights to its lineup if possible. Disney CEO Bob Iger thinks of the new ESPN direct-to-consumer (DTC) streaming service coming to market next year — which the company has given the working title “Flagship” — as a perfect place to offer local rights because of its ability to serve geotargeted content to local audiences, as he told analysts during an earnings conference call in 2023.
“Regarding local sports, the technology that we will have for ESPN DTC will give us the ability to provide local sports in a pretty robust way, basically what the RSNs are doing,” Iger said.
ESPN chairman Jimmy Pitaro said essentially the same at a recent media event for the network, saying that teams and leagues looking for an outlet after being cast off from a Bally Sports channel or needing more security than their current RSN provides should give him a call.
“We very much believe that Flagship should be part of the solution,” Pitaro said in reference to local sports rights. “We’ve made that point to various leagues and commissioners that we are very interested in stepping up here. It doesn’t necessarily have to be in connection with Flagship. It can be an upsell as part of Flagship.”
What would these moves mean for consumers? It’s likely the days of paying extra to get local teams aren’t over, even if they move to streaming; ESPN and Amazon have both discussed local rights in the context of an upsell, perhaps in the form of an add-on customers pay an extra monthly fee to get. But even as an add-on, viewers wouldn’t have to pay for an extra bundle of cable channels they may not want to watch. That would keep the overall price down for customers if their main goal in adding a streaming service like Flagship or an eventual Prime video Sports platform is to watch local sports action.
In the meantime, teams have been coming up with creative solutions to get their local games in front of the largest audiences possible. The Dallas Stars have gone the furthest, creating a free streaming platform that will be available to all area fans to serve as their local broadcasting home in 2024 and beyond. Other clubs like the Utah Jazz and Vegas Golden Knights have chosen to go to local broadcast networks, which deliver their games to a much wider audience than RSNs used to do.
But the revenue that ESPN and Amazon could offer prospective RSN-quitting teams could be too much of a lure to ignore. NBA, NHL, and MLB teams rely on local broadcast revenues, and while putting games on over-the-air channels expands their reach and makes them easier to access for fans, teams often struggle to make the same amount of money in such arrangements as compared to putting the games on cable.
The collapse of the business model that made RSNs profitable for so long has left teams at an inflection point. Many are desperately seeking a solution that will allow them to continue pulling in the same amount of money they used to, and Amazon and ESPN could be the answers they’re looking for.
Amazon Prime Video
Amazon Prime Video is a subscription video streaming service that includes on-demand access to 10,000+ movies, TV shows, and Prime Originals like “The Lord of the Rings: The Rings of Power,” “Jack Ryan,” “The Marvelous Mrs. Maisel,” “The Boys,” and more. Subscribers can also add third-party services like Max, Showtime, STARZ, and dozens more with Amazon Prime Video Channels. Prime Video also offers exclusive live access to NFL Thursday Night Football.