Not too long ago, cable operators and sports network executives jointly opted to reject the idea of a-la-carte subscriptions, preferring instead to bundle them together in order to generate more money in order to be better able to compensate the expensive sports channels, which had to pay high fees for sports rights.
In effect, all cable/satellite TV subscribers subsidized the sports networks for the smaller group of sports subs.
Then came streaming, and viewers abandoned cable TV and flocked to broadband, leaving sports channels with fewer per-sub revenue shares, as well as fewer viewers for lower advertising CPMs.
Now, two of the largest U.S. regional sports networks (RSN) are on the verge of shutting down. Bally Sports filed for bankruptcy, and AT&T Sports is expected to simply shut down. Bally Sports (which is co-owned by Sinclair and Entertainment Studios) has $8 billion in debt stemming from the 2019 channel acquisitions from Disney (when it was called FOX Sports Network). Warner’s AT&T Sports offered to let the teams take over the channels at no cost because it doesn’t have enough money to pay for their sports rights.
Bally Sports carries the games of 40 major sports teams, and AT&T Sports broadcasts games of Major League Baseball, the National Basketball Association, and the National Hockey League.
The alternatives for the sport clubs are now giving the channels streaming rights, giving sports rights at lower fees, taking over the channels themselves, or upgrading their own streaming platforms. Ultimately, the clubs have to figure out how to generate revenue from sports rights that account for up to 50 percent of their revenues.
Operators that would move games online are prepared to charge a fee. Bally Sports + will cost $19.99 a month, and MSG+, which carries the New York Knicks and the New Jersey Devils, will be $29.99 a month. Warner Bros. Discovery Sports (or WBD Sports) is now preparing to launch a streaming service that will absorb both HBO Max and Discovery+
This is not just a U.S. problem. As VideoAge‘s E-Beat Newsletter reported on March 13, 2023, Italy’s Lega Serie A football (soccer) league is looking to acquire the country’s leading pay-TV operator Sky Italia. TV rights are currently held by DAZN, which is paying 937 million euro (U.S.$1 billion) for rights that are expiring this year. New bids for the next five years are expected to be received by this summer, although few think that bids will reach higher amounts, which prompted the idea of acquiring a broadcast outlet.
They will lose viewers,too many other alternatives