Regional sports networks are on the brink of collapse, and that’s ok
Regional sports networks are on the brink of collapse, and that’s ok
Sports leagues and distributors have been drifting away from RSNs for a long time. Their end could give way to a better future for fans.
When I saw that Main Street Sports Group was back in the sports media news during the holidays, I immediately assumed the company was in some kind of financial trouble again. That assumption has unfortunately been borne out, as Main Street has been approaching teams from the MLB, NBA, and NHL teams whose games it distributes on its family of FanDuel Sports Network regional sports channels to accept lower rights fee payments or accept other measures to help it through choppy fiduciary waters.
Such headlines were common back when Main Street Sports Group was known as Diamond Sports Group, and the company was trying to resolve lengthy bankruptcy proceedings that saw it nearly fold more than once. Eventually, Main Street was able to emerge from bankruptcy, but even then, the writing seemed to be on the wall for regional sports networks as a group. The time of the RSN has passed, and it’s time for teams to prepare for a future where their in-market games are distributed via streaming.
When it emerged from bankruptcy, it seemed that perhaps Main Street had a viable plan to continue in business. It had considerably reduced its debt, and with a slimmed-down roster of teams to distribute, it seemed like it had worked out a formula to keep revenue and expenditures balanced. A partnership to distribute the FanDuel Sports Network app on Prime Video felt like a good way to bring the service to the attention of a new audience, as well.
But now, Main Street has seen all of its MLB partner clubs cancel their contracts in the wake of requests for reduced rights fee payments from the company. Main Street has also missed rights fee payments to NBA teams in recent months, and has asked NHL partner clubs to take 20% less in fees for the remainder of the current season. The RSN distributor has also sounded out companies like DAZN and possibly Fubo about acquiring it outright, to no avail so far.
Zooming out from the once-again flailing Main Street Sports Group, regional sports channels around the country seem to be on their way out. The only RSNs that are standing on their own two feet these days are channels like NESN and YES Network, which are owned at least in part by the same entity that owns the teams that play there. These big-market clubs and their huge fanbases have a ton of leverage with cable channel distributors and can command healthy programming fees for the rights to air their RSNs.
But even here, there are cracks in the foundations. In September, the Seattle Mariners’ RSN partner Root Sports Northwest televised its final game, with the broadcast duties for Mariners games to be taken over by MLB this season. The channel was owned by the team, but that wasn’t enough to keep it going. MLB commissioner Rob Manfred recently licensed in-market rights to a bundle of similar teams whose games have been distributed by the league to ESPN, but only until 2028 — the year in which Manfred wants to massively overhaul the way his league offers in-market games.
In 2028, Manfred hopes to launch a national streaming platform that will carry all in-market rights from every MLB club. Getting buy-in from big-market teams who still profit from their RSNs could be difficult, but one of the richest clubs in the league has already seen the light. In October, Boston Red Sox CEO Sam Kennedy voiced his approval of the scheme to centralize MLB in-market rights.
The NBA is also trying to assemble an in-market streaming platform that carries a large number of teams, and once these platforms launch, they can be sold either directly to the consumer or licensed to parties like Prime Video or ESPN for distribution. Either way, they could dramatically increase fan access to in-market games, which were previously only shown on RSNs buried in expensive cable plans. NHL hasn’t publicly discussed plans for its streaming future as extensively as MLB and the NBA have, but it’s reasonable to assume they are also plotting out their next steps. When these league-wide services launch, there simply won’t be enough programming left to justify the continued existence of RSNs any longer.
Channel distributors are well aware that RSNs are on their way out, which is why companies like Comcast have insisted that RSNs be placed on their higher-priced channel plans during carriage negotiations, and for the channels themselves, that means less money coming into the top of the funnel. Fewer customers are watching such channels, and the future doesn’t look bright. Leagues have been hesitant to embrace streaming as a main distribution method for their in-market games because of the revenue formerly promised by regional sports networks, but that well has run dry.
The renewed struggles of Main Street Sports Group to meet its financial obligations to partner teams are simply another sign of a crystallizing truth. The time of the regional sports network is over, and while leagues may not immediately recoup the revenue they were making from RSNs by transitioning to streaming, they could soon find they simply have no other choice.
FanDuel Sports Network
FanDuel Sports Network is a direct-to-consumer streaming service that offers live games for those who want access to your local FanDuel Sports Network RSN without subscribing to a cable or satellite package. It was most recently known as Bally Sports, and prior to that, Fox Sports Network.