It was a tumultuous 2024 for regional sports networks and many of their displaced professional sports-team partners, with the erstwhile Bally Sports (now Fanduel Sports Network) shedding numerous channels (and team relationships) amid Chapter 11 restructuring, and other RSNs, notably the AT&T SportsNet channels, shutting down altogether.
Like many other RSN refugees, the NBA’s Utah Jazz forged a hybrid broadcast/DTC distribution model for its non-nationally televised games following Warner Bros. Discovery’s decision last year to shutter AT&T SportsNet Rocky Mountain. Jazz games are widely broadcasted across the Southwest on Sinclair Broadcast Group station KJZZ-TV this season. Games are also available via $19.99-a-month direct-to-consumer streaming app Jazz+.
Despite generating around 31,000 Jazz+ signups, the team is only pulling in around 50% of the revenue from its hybrid local TV model versus what it was getting paid by AT&T SportsNet, according to a CNBC report. But speaking to CNBC during the just-wrapped NBA All-Star weekend, Jazz owner Ryan Smith suggested he has no regrets about the decision to pull away from the old RSN model.
“You have to zoom out a little bit beyond just the RSN revenue stream,” Smith told CNBC. “Our team has about seven different revenue streams, and the other six are enhanced by broader distribution of our games. The more people watch, the more people come to games, the more we sell in concessions, the more money we bring in with sponsorships.”
Indeed, via KJZZ, Jazz games now reach around 6.3 million homes, reaching many viewers the team wasn’t previously accessing. Compare that to the 760,000 homes it was reaching back on SportsNet Rocky Mountain.
“We weren’t providing the best experience,” Smith added in the CNBC interview, noting carriage blackouts that often interrupted fan access within the pay TV ecosystem. “You have to start with experience first, and with the streaming product, now we’re reaching younger audiences.”
Smith’s claim is validated, at least to an extent, by CNBC’s most recent valuation of NBA franchises, also published over All-Star weekend. Based on a variety of factors, including market size and game attendance, the news network ranked the Jazz as the league’s 20th most valuable team, appraising its worth at $3.75 billion. However, last season, with its RSN deal still ongoing, the Jazz were valued by Forbes at only $3.55 billion.
According to the Sports Business Journal, the Jazz were getting between $24 million - $28 million per season via their AT&T SportsNet deal. With the team generating $367 million in total revenue during their last season on the RSN, the 2023-24 campaign (also per CNBC data), the Utah franchise is among a number of NBA teams (the Phoenix Suns included) that haven’t felt too much pain from a transition to a hybrid broadcast/DTC model.
NBA teams like the Jazz are further buffered from RSN tumult by the league’s recent 11-year $76 billion TV sports rights deal — individual per-season team payments of $77 million from that national agreement will start next season.
This dynamic also applies, of course, to the New York Knicks, which soon could be without a regional sports network home. Altice USA has dropped MSG Networks, which also houses the NHL’s Rangers, Islanders and Devils. Based on recent comments made by Altice USA CEO Dennis Mathew, MSG Networks might not be restored to Optimum cable systems in the Tri-State area any time soon. And without that distribution, some analysts believe MSG Networks will go bankrupt.
For their part, all of the aforementioned MSG Networks tenants, including the Knicks, are distributed locally over-the-top via the recently launched Gotham Sports App.
While NBA teams feel little pain from the demise of the RSN ecosystem, the dynamics are a little different for Major League Baseball franchises, which typically collect twice the local TV money vs. their NBA brethren because they have twice the number of regular-season games, per CNBC. MLB teams also don’t collect nearly as much national TV money.
“If the cliff you’re falling off of is $30 million per year, that’s one thing,” WME Sports co-head Karen Brodkin said to CNBC. “If you’re looking at a falloff of $100 million or more for baseball, that’s a much more dramatic issue.”
As revenue potential from pay TV fades, more and more RSNs are going over-the-top themselves. Earlier this week, SportsNet New York (SNY), RSN home of baseball’s New York Mets, announced a collaboration with Major League Baseball to launch a new $25-a-month DTC app for the team.