NBA, NHL, MLB Unlikely to Buy Bally Sports Networks, Leaving Them in Limbo Ahead of Potential Bankruptcy
NBA, NHL, MLB Unlikely to Buy Bally Sports Networks, Leaving Them in Limbo Ahead of Potential Bankruptcy
Bally’s regional sports networks (RSNs) may be approaching the end of the line. Reporting from the New York Post suggests that the MLB, NBA, and NHL, which had been in discussions to acquire the RSNs from their owner Diamond Sports Group (DSG), are now losing interest in such a venture.
Diamond engaged in talks with said leagues earlier this fall, looking to sell not just the RSNs, but the whole company to one of the leagues. But when Diamond slashed its end-of-year profit outlook in November, leagues became uninterested in paying a premium price for the company, which is now likely headed to bankruptcy court in the early part of 2023.
The financial side of operations for DSG looks grim indeed. Most of its contracts with baseball teams cost Diamond money rather than bringing in a profit, and the same is true for around half its NBA contracts and a handful of its NHL deals, according to the Post. DSG’s board voted to block its parent company Sinclair Broadcasting from having any future say in the RSNs in early December, a move partially intended to show potential investors that DSG had a plan, and those existing contracts were worth keeping for sports leagues.
It is unlikely that those contracts will be renewed in the future, and team executives are pleased that their respective leagues might soon attract more young viewers via different media deals. Such viewers are not currently drawn to games on expensive and difficult-to-find RSNs in large numbers, whereas making games more accessible via streaming would theoretically bring younger viewers in droves.
It speaks volumes about the potential drawbacks to RSNs that the company that operated them for over 20 years had no interest in taking them back at any price. FOX, which owned Bally’s RSNs from 1996 until 2018 when they were sold to Disney for $20 billion, was offered the chance to buy them back from Disney at a steep discount, according to the Sports Business Journal.
FOX passed, and the 21 RSNs were eventually sold to Sinclair for $10.6 billion in 2019. SBJ’s John Ourand asked FOX Sports CEO Eric Shanks if there was any price at which FOX might consider taking another run at the group of RSNs, but the writer got a simple “no” headshake in response.
“We also knew what it took to get that value,” Shanks said. “We used a lot of Fox leverage and a lot of right timing and right product in certain areas to get the value into those RSNs. On their own, we knew what would happen.”
Without the FOX brand, and without sibling offerings like NFL and college football to help promote the RSNs, they became unsustainable quickly. DSG’s direct-to-consumer offerings have not helped the situation tremendously, either. Although Bally Sports+ retained 70% of the customers it saw sign up for its free trial in the third quarter of 2022, it is next to impossible for those customers to make up for the financial cord-cutting losses that RSNs are suffering.
Bankruptcy court could mean the end of the road for DSG, as sports leagues and other media companies might be able to scavenge rights at a bargain price. Alternatively, it could give DSG a chance to restructure itself under bankruptcy protections. MLB is already preparing to pick up the rights to teams that DSG sheds in bankruptcy court, though DSG denies it is planning to reject any MLB contracts.
Whether the fall of DSG leads to a major restructuring in sports media is less immediately clear, but it is certain that RSNs will likely have to evolve in the very near future. NBCUniversal announced told The Streamable that it was considering making its RSNs available to Peacock Premium Plus subscribers in select markets, and if a media company like Amazon picks up certain rights from DSG during bankruptcy proceedings, Bally’s RSNs could find themselves as streaming exclusives in the not-too-distant future.
Bally Sports+
Bally Sports+ was a direct-to-consumer streaming service that provided live, in-market games without requiring a cable or satellite subscription. It allowed fans to watch their local Bally Sports regional sports network (RSN) without a traditional TV package.