Its long-running bankruptcy saga ended months ago, but the comings and goings for the erstwhile Bally Sports regional sports networks continue.
Five NBA teams are still pondering whether to take their chances with a far-from-ready-to-launch local TV gambit being set up by the league, or to return to their respective RSN homes, now rebranded under the FanDuel Sports Network moniker.
According to the Sports Business Journal, a “soft deadline” to make that decision expired April 1. FanDuel parent company Main Street Sports Group (formerly branded as “Diamond Sports Group”) has decided to delay the deadline for the Miami Heat, Cleveland Cavaliers, Milwaukee Bucks, Atlanta Hawks and Minnesota Timberwolves to decide whether they want to return to their respective RSNs through an undisclosed period.
Currently, the National Basketball Association is negotiating with Amazon, YouTube, Apple and other companies to create a new national RSN. It’s not clear when that would be established. But ceding Main Street’s demands that they return to their FanDuel channels under two-season contract might put the teams out of position to join that new venture at launch.
Rights fees from RSN distribution have dwindled amid the broader revenue erosion of FanDuel’s subscriber base. But the RSN group has some stability post-bankruptcy — Main Street is only $300 million debt versus $9 billion before its March 2023 Chapter 11 filing. And FanDuel channels still pay more in local TV money than the alternative — which is going out with a hybrid business model of local broadcast and direct-to-consumer streaming.
Among the NBA clubs that have run this play already, the Utah Jazz are perhaps the most financially transparent. Amid All-Star Weekend in February, Jazz owner Ryan Smith conceded that such a hybrid model, involving Sinclair Broadcast station KJZZ-TV and DTC app Jazz+, was netting the team only around $16 million this current 2024-25 NBA season, 50% of what the Jazz were making via the defunct AT&T SportsNet Rocky Mountain the season before.
Smith said the vastly expanded viewer reach of broadcast versus the old RSN paywall made the deal attractive, with the Jazz boosting things like ticket and merchandise sales. But for the Heat, which are reportedly still making around $55 million this season on FanDuel, that argument might be a tougher sell.
The guaranteed higher TV money is a big reason why SBJ is reporting that the T’Wolves, which make around $24 million a year on FanDuel, have already decided to opt back in, and the Bucks (also making $24 million) are said to be close to it.
Originally, Main Street was demanding that the teams commit to FanDuel for two more seasons, but pushback from the clubs has apparently softened the RSN company on that stipulation.
Among the five potential RSN refugees, only the Cavaliers are considered a real possibility to bolt for the 2025-26 season. Cleveland owner Dan Gilbert owns the over-the-air Rock Entertainment Sports Network and has a logical broadcast destination already in place for the Cav’s local games.
If the clubs do decide to go hybrid broadcast, they need to do it soon. Not only do distribution deals need to be hammered out with station groups, but advertising must be sold, and DTC streaming apps must be built and launched.
Regardless of how it all shakes out, the clubs have a buffer, with the $76 billion 11-year national TV deal signed by the NBA getting doled out to teams starting next season. That agreement will pay each team $142 million a year.