(03-02-2023 04:00 PM)JSchmack Wrote: (03-02-2023 03:31 PM)whittx Wrote: To be fair, Fox had the advantage of requiring FSN carriage to get Fox News and Speed/FS1. Without those ties, Sinclair had no assets to tie to Bally's, causing their downdall.
100%
MLB has been so far out in front of this and excellently prepared...
- When the 14 RSNs went up for sale and Sinclair won, MLB had actually bid on them.
The idea was they could consolidate rights back into league control, be prepared for the "next generation of content distribution" and sell in-market streaming as part of MLBtv (all they have to do is turn OFF geo-blocked location settings for 14 teams).
They ALSO look at it as a way to organically help revenue inequality between teams, AND provide a better fan experience with no local blackouts (starting with those 14).
When MLB lost the bid to Sinclair, they saw the price Sinclair paid and said "uhh... THAT'S going to be a problem." They've been expecting the Sinclair RSN collapse since the Fox/Disney merger.
It will be interesting to see since MLB seems to have a vision of taking back control of local team media rights, but the most valuable teams like the Yankees, Red Sox, Cubs and Dodgers are all (a) still making a ton of money off their respective RSNs and (b) to the extent their own RSNs face issues, they still want to control their own streaming rights because they have the most fans.
The NBA is in a similar position as MLB, but haven’t been as outwardly antagonistic towards the Diamond RSNs. Now, maybe that’s because the NBA is in a better position for their national TV deals going forward compared to MLB, so maybe the NBA is taking the view that they would be better to do what they need to do to keep these RSNs alive for at least a few more years.
John Ourand and Andrew Marchand have been making some good points on the RSN business in general for the past few weeks. The biggest hurdle is that teams will likely never make as much off of their local rights in a streaming era as they did in the RSN era… and shifting such a huge part of the business to a platform that objectively makes *less* money is *really* hard to do (especially when budgets and payrolls are impacted by the amount of TV money).
They gave the example of the LA Clippers rights this year. Steve Ballmer had been itching for a long time to take the Clippers local media rights in-house and create a streaming platform. Ballmer is one of the OG tech billionaires from Microsoft, so this is directly in his wheelhouse. However, when he sat down and really took a look at the economics of doing a local sports streaming service, they simply didn’t look good. So, this past fall - even when everyone *knew* the Diamond/Bally RSNs were heading toward bankruptcy - the Clippers signed an extension with Bally Sports LA.
Just think about that for a moment: a tech billionaire owner decided that they were better off extending a TV deal with an RSN that they *knew* was going to be bankrupt in a year as opposed to starting their own local streaming service.
I’m just wondering how bad the economics of that streaming model were if the ultimate decision was, “Oof - that’s so ugly that we’re better off rolling the dice with the company that’s filing bankruptcy in a few months.” That’s the LA market, too, as opposed to Pittsburgh or Salt Lake City or San Antonio.
Ultimately, I think the biggest sports brands will be fine for the next decade or so because broadcast television still wants/needs them: NFL, NBA, Big Ten, and SEC. The strongest local franchises in the biggest markets like the Yankees, Lakers, Cubs, Red Sox, etc. also have large fan bases that they are insulated a bit more in a switch to a direct-to-consumer model. However, the Diamond RSNs are the canary in the coal mine for the “middle class” brands in sports. We’re seeing it now with the Pac-12 rights discussions and other “nice to have but not *must* have” sports league look like they’re at risk.
Most of these media companies that control sports rights are also in the movie business and you can see their strategy there: they’ll continue to invest in a handful of huge blockbuster tentpole franchise brands in the high end and find other cheap filler high ROI movies on the low end (particularly horror), but the mid-budget non-tentpole film (think Jerry Maguire, Good Will Hunting, or those other Oscar-caliber ‘90s films) is a dinosaur (and if they get made at all, they’re going to streaming as opposed to the theaters).
These companies are likely going to do to sports (lots of money to the upper class at the expense of the middle class) what they are already doing to their movie business.
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Bally Sports Will Declare Bankruptcy Next Week
