The Rise and Fall of Regional Sports Networks
In an industry that intertwined local sporting pride with television entertainment, the inception of the first sports-oriented TV channel focusing on a local market in 1969 marked a significant era. It began with a pioneering deal involving the New York Knicks and the Rangers, setting a precedent for what would become a highly influential part of the broadcast landscape: Regional Sports Networks (RSNs).
Throughout the 1990s, RSNs burgeoned, reaching their zenith in 2010 with over 100 million households connected to cable TV. However, this golden era was not to last. The following years saw a steady decline in the number of households with cable, attributed largely to cord-cutting phenomena and a noticeable dip in interest among the younger demographics.
While most cable, satellite, and live TV streaming services accommodate RSNs, the availability of networks is not uniform across all providers. FuboTV, for instance, offers a myriad of RSNs, but their presence is not guaranteed in every region. Conversely, platforms like Hulu, YouTube, and Sling TV have been noted for their absence of access to popular RSN groups such as AT&T SportsNet and Bally Sports, demonstrating the fragmented nature of the current RSN landscape.
Bally Sports: A Case Study in Decline
Bally Sports Regional Network, operating under Diamond Sports Group, provides coverage for 42 NBA, NHL, and MLB teams, serving as a prominent player in the RSN domain. However, its fortunes have waned dramatically, with cash flow projections plummeting from $1.5 billion in April 2019 to just $750 million by July 2020. This catastrophic decline led Diamond Sports Group to file for Chapter 11 bankruptcy and subsequently sue Sinclair Broadcast Group for divesting what it termed "insolvent" assets onto them.
This downfall has compelled teams to seek alternatives, either by launching their broadcasting avenues or by establishing local partnerships, demonstrating the crumbling foundation upon which RSNs stand.
The crux of the decline in RSNs lies in their archaic revenue model, which relied heavily on fees from all cable subscribers — a scheme severely upended by the seismic shift towards streaming services.
The Broader Picture: Sports Broadcasting in the Streaming Era
While some facets of sports broadcasting, such as the NBA and NFL, continue to thrive owing to global interest and innovative offerings like NFL RedZone and NBA+, the movement away from traditional broadcasting models poses significant threats to leagues that traditionally depend heavily on RSNs for revenue generation.
This evolving media landscape could have profound implications on team valuations, player salaries, and the very structure of leagues, as the foundations of sports broadcasting continue to shift underneath them.
The Evolution of Pittsburgh Sports Broadcasting
The historical trajectory of sports broadcasting in Pittsburgh mirrors the broader changes impacting regional sports networks, evolving dramatically from the Pirates Cable Network in 1986 to SportsNet Pittsburgh in 2023. Recent years have seen AT&T's unsuccessful attempt to offload its regional sports networks, as well as disputes with providers like Dish Network, underscoring the sector's volatility.
Furthermore, Warner Bros. Discovery's move towards Chapter 7 bankruptcy serves as a sobering reminder of the precarious position that RSNs find themselves in, even as SportsNet Pittsburgh continues to broadcast Pirates baseball, Penguins hockey, and local sports content amid ongoing uncertainty.
Future Outlook on Regional Sports Networks
The waning appeal of RSNs does not just signify a transition away from cable but hints at a broader shift towards business models that prioritize consumer preferences and flexibility. While team-owned RSNs in major markets may persist, their future remains shrouded in uncertainty as the number of cable households continues to dwindle.
As of October 27, 2023, the fate of over 36 teams tied to the financially beleaguered Bally Sports network hangs in the balance. The sports broadcasting industry stands at a crossroads, closely observing the unfolding of current challenges and potential opportunities, aiming to chart a path forward in this undeniably transformative era.