Diamond Sports Group Bankruptcy Illustrates Regional Sports Network Challenges

Forbes Business Media Diamond Sports Group Bankruptcy Illustrates Regional Sports Network Challenges Derek Baine Contributor Opinions expressed by Forbes Contributors are their own. I am Media Forecasting Experts Managing Director, 30 years experience. Following Jul 19, 2023, 05:39pm EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin Photo by Ron Vesely/MLB via Getty Images.

MLB via Getty Images The long and drawn out drama being played out between sports teams & leagues and management at Sinclair Broadcasting Group subsidiary Diamond Sports Group illustrates the fact that the future of most Regional Sports Networks (RSNs) is bleak, unless they are owned by the teams themselves. That’s due to the fact that RSNs are locked into long-term sports-rights deals, while multichannel operator pay escalating fees on a per subscriber basis. With multichannel subs continuing to go down due to cord-cutting and cord-shaving, revenue continues to decline rapidly at the RSNs.

With the Diamond Sports Group bankruptcy filing, the company had hoped to renegotiate much lower rights fees with the teams and go on with business as usual with their Bally Sports RSNs, but making a profit rather than blowing through a huge amount of cash. What we are seeing is that many teams would prefer to get a new broadcast and online DTC partner, or go it alone. The most recent news on the Diamond front is that Diamond Sports Group was unable to renegotiate a much lower price on the remainder of its 20-year $1.

5 billion contract with Major League Baseballs’ Arizona Diamondbacks for local rights for its RSN. On Tuesday, the Diamondbacks will play the Atlanta Braves at Atlanta’s Truist Park and the game will be shown on a new RSN called MLB Arizona Diamondbacks which has carriage with Charter Communications CHTR , Comcast CMCSA , Cox, DIRECTV and Fubo. This new model will grow subscribers dramatically, the Diamondbacks will be seen in 4.

7 million homes vs. the 930K subscribers to Bally Sports Arizona where the Diamondbacks previously aired. MORE FOR YOU New Apple Exclusive Reveals iPhone 15 Design Surprise The Worst Scene From The Flash Is Now Going Viral Phoenix Salt Lake City Set High Temperature Records Here s Where Else Records Could Fall Whether that channel will be completely shut down has not been announced, however, it lost two other major tenant’s on Monday, the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury.

The two are partnering with broadcaster Gray Television GTN and with Kiswe for a direct-to-consumer DTC offering. The NHL Coyotes remain on Bally Sports Arizona. T he Suns and Mercury announced their departure from Bally Sports Arizona in late April.

However, a Federal Bankruptcy Judge in Texas put a halt to the Phoenix Suns and Mercury bid to abandon Bally Sports Arizona in mid-May. Diamond had previously filed suit against the two teams, Gray Television and Kiswe Mobile Inc. for tortious interference.

However, Diamond Sports Group dropped its court objection to the Gray/Kiswe transaction last week, clearing the way for the transition away from Bally Sports Arizona. It is unclear what concessions were made to Diamond in order to get them to drop their objection. Still, most doubt that a model like Gray/Kiswe will generate as much money as the rights fees that they were getting from Bally Sports Networks.

Karen Brodkin, co-head of WME Sports and EVP content strategy and development at Endeavor told The Hollywood Reporter, “I think what broadcast groups are seeing in other markets is there is a part that includes some level of risk on both sides. ” And marketing a new DTC service can be difficult. Hillary Mandel, EVP and head of Americas for IMG Media told The Hollywood reporter that the challenge of going to a DTC model is “going to be the customer acquisition process—that is a whole other kettle of fish.

Broadcast captures the casual fan and the DTC captures the true fan who wants to see all the games. And then you have to build interesting things and giveaways on top of that to get other people to tune in. ” The San Diego Padres also bid adieu to Diamond Sports Group and, as in that case, subscribers were given the games for free online for a short period of time (this time at dbacks.

com/watch) and then transitioned to a MLB. TV local feed for a $19. 95/month fee.

This is separate from the out-of-market MLB. TV channel. MLB boasted that since May 31 when it took over the Padres games, reach expanded by a hefty 189% and viewership leading into last week’s All-Star break jumped by 14%.

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