The Origins and Decline of Regional Sports Networks
It all started in 1969 when the New York Knicks and Rangers set the precedent, becoming the first sports teams to have their games broadcast on a sports channel dedicated to a local market. This pioneering move kicked off what would become known as Regional Sports Networks (RSNs), a phenomenon that would grow in popularity and reach its zenith in the 1990s. By 2010, RSNs were thriving, with over 100 million households connected to cable and tuning into local sports content nationwide.
However, the landscape began to change as the number of households with cable subscriptions started to decline. This drop can be attributed to a combination of factors, including the rise of cord-cutting and a waning interest in cable services among younger generations. While most cable, satellite, and live TV streaming services continue to offer RSNs, accessibility issues emerge as not all networks are available across every platform. For instance, fuboTV provides a range of RSNs, although their availability varies by region. In contrast, platforms such as Hulu, YouTube, and Sling TV do not offer access to major RSN groups like AT&T SportsNet and Bally Sports, signaling a shift in the distribution and consumption of regional sports content.
The Bally Sports Dilemma
A poignant example of the ongoing struggles faced by RSNs is the case of Bally Sports Regional Network. Operated by Diamond Sports Group, Bally Sports serves as the home for 42 teams across the NBA, NHL, and MLB. Initially projected to generate a cash flow of $1.5 billion in April 2019, these expectations plummeted to $750 million by July 2020. The financial turmoil led Diamond Sports Group to file for Chapter 11 bankruptcy and subsequently sue Sinclair, accusing them of offloading assets that were already insolvent.
This downturn has prompted some teams to explore alternatives, including creating their own broadcasting channels or forging partnerships at the local level. The core issue at hand is the traditional revenue model of RSNs, which relies on securing fees from all cable subscribers, a structure that is becoming increasingly untenable in the age of streaming.
Adapting to the Streaming Era
The global appeal and digital offerings of leagues like the NBA and NFL have allowed them to remain resilient amidst the changing sports broadcasting landscape. However, leagues and teams that heavily rely on RSNs for income face significant challenges. The ongoing shift from traditional broadcast models to streaming services is likely to have far-reaching consequences, potentially impacting team valuations, player salaries, and the overall structure of professional sports leagues.
The Evolution of Sports Broadcasting in Pittsburgh
In Pittsburgh, the story of regional sports broadcasting has been marked by continuous evolution, from the launch of the Pirates Cable Network in 1986 to the operations of SportsNet Pittsburgh in 2023. The attempts by AT&T to sell its RSNs, coupled with disputes with providers like Dish Network, underscore the volatility of the regional sports broadcasting market. The move by Warner Bros. Discovery towards Chapter 7 bankruptcy further highlights the precarious state of RSNs. Amidst these challenges, SportsNet Pittsburgh continues to broadcast Pirates baseball, Penguins hockey, and a variety of local sports, embracing uncertainty as the new normal.
Looking Ahead: The Future of RSNs
The ongoing decline of RSNs signifies a broad shift in consumer preferences, moving away from traditional cable packages to models perceived as more aligned with the needs and habits of today's viewers. In major markets, team-owned RSNs might still find a way to survive and even thrive, but their future remains shrouded in uncertainty as the number of cable households continues to dwindle. As of October 27, 2023, the fate of more than 36 teams connected to the bankrupt Bally Sports network hangs in the balance, leaving the sports broadcasting industry in a state of flux, keenly observing and adapting to the evolving challenges and opportunities.
The tumultuous journey of RSNs from their heyday to the current era of instability reflects broader shifts in media consumption and sports fandom. As the industry navigates through these turbulent waters, the resilience and innovation of leagues, teams, and broadcasters will be crucial in shaping the future of sports broadcasting in an increasingly digitized world.