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RSNs/Local TV deals in the NBA might go away long term
Posted on 2/24/23 at 10:56 am
Posted on 2/24/23 at 10:56 am
New article on the state of Regional Sports Networks like Bally's. LINK It's worth reading if you have interest in this topic, but here are the bullet points.
- RSNs just aren't a viable business model anymore. Bally's is going bankrupt and Warner Bros/Discovery wants leagues to take their rights back.
- Going direct to consumer streaming would cut local rights revenue from $30 million to $8 million according to research done by NBA teams.
- The league may be looking at the expected increase in national streaming rights as the best way to fix this problem. That has 3 important implications 1) Possibly a single streaming service with no blackouts. 2) The new national TV deal cap spike will still be big, but maybe not as big as previously expected if most local TV revenue dries up. 3) This was a big source of income inequality between the haves and have nots in the league, I could see serious tax/revenue sharing changes happen over this. (2 and 3 are my takes, not in the article).
- The Orlando Magic get $40 million a year on their Bally's deal. The Pels deal that just ended was $12-$14 per year. That's nuts because the Magic were a lottery team the year before and after the deal started in 2016-17.
- RSNs just aren't a viable business model anymore. Bally's is going bankrupt and Warner Bros/Discovery wants leagues to take their rights back.
- Going direct to consumer streaming would cut local rights revenue from $30 million to $8 million according to research done by NBA teams.
- The league may be looking at the expected increase in national streaming rights as the best way to fix this problem. That has 3 important implications 1) Possibly a single streaming service with no blackouts. 2) The new national TV deal cap spike will still be big, but maybe not as big as previously expected if most local TV revenue dries up. 3) This was a big source of income inequality between the haves and have nots in the league, I could see serious tax/revenue sharing changes happen over this. (2 and 3 are my takes, not in the article).
- The Orlando Magic get $40 million a year on their Bally's deal. The Pels deal that just ended was $12-$14 per year. That's nuts because the Magic were a lottery team the year before and after the deal started in 2016-17.
This post was edited on 2/24/23 at 11:04 am
Posted on 2/24/23 at 11:36 am to TigerinATL
quote:
The Orlando Magic get $40 million a year on their Bally's deal. The Pels deal that just ended was $12-$14 per year. That's nuts because the Magic were a lottery team the year before and after the deal started in 2016-17.
And this right here is why large market teams can afford the tax more than small markets. GS has a 150 million a year local TV deal, that’s the only way they can pay the tax.
That’s my biggest gripe about the disparity in the league, going to one streaming service, $300 a year for all games and that money distributed evenly among all teams would balance the spending power immensely. You’ll still have teams with an advantage from ticket revenue, but not the nearly 200 million a year it currently is.
Posted on 2/24/23 at 12:39 pm to Soggymoss
quote:
And this right here is why large market teams can afford the tax more than small markets. GS has a 150 million a year local TV deal, that’s the only way they can pay the tax.
That’s my biggest gripe about the disparity in the league, going to one streaming service, $300 a year for all games and that money distributed evenly among all teams would balance the spending power immensely. You’ll still have teams with an advantage from ticket revenue, but not the nearly 200 million a year it currently is.
This is what MLS did with their Apple deal. The league made sure all team local deals ended at the same time and made a deal for Apple to have the rights to all MLS games.
I don't see that happening anytime soon with the NBA though unless they can command such a high price between ESPN, TNT, and Amazon/Apple that teams such as the Lakers/Knicks/Warriors wouldn't take much of a financial hit.
This post was edited on 2/24/23 at 12:41 pm
Posted on 2/24/23 at 4:24 pm to Mickey Goldmill
Follow up article, Warner Bros. Discovery plans to be out of the RSN business by the end of March.
LINK
They own the rights to the Jazz, Rockets and Blazers. It's unclear what this means for those 3 because WBD plans to be in on the NBA national rights bidding and wants to stay in the NBA's good graces.
quote:
Warner Bros. Discovery has told teams that it plans to exit the regional sports network business entirely within the next several weeks.
The company, which operates three AT&T SportsNet-branded channels in Denver, Houston and Pittsburgh and has a minority stake in the Root Sports channel in Seattle, has told teams that they have until March 31 to reach an agreement to take their rights back. If the RSNs can’t reach deals with the teams, the channels eventually plan to move forward with a Chapter 7 liquidation filing.
LINK
They own the rights to the Jazz, Rockets and Blazers. It's unclear what this means for those 3 because WBD plans to be in on the NBA national rights bidding and wants to stay in the NBA's good graces.
This post was edited on 2/24/23 at 4:25 pm
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