Television has changed the course of sports as long as it has existed, in ways both sweeping and specific.
The NBA Finals were broadcast on tape delay as recently as 1980, but live broadcasts of epic clashes between the Boston Celtics and Los Angeles Lakers helped usher in a golden era for the league. Baseball’s Dodgers and Giants left New York in the 1950s in part for big paydays from a TV company in California. An escalation clause in a TV deal once helped the Philadelphia Phillies sign Pete Rose.
Now, changing viewing habits are fueling another shift for American sports. With one regional sports network in bankruptcy and others losing subscribers, the local sports TV model is in upheaval, threatening the financial foundations of MLB, the NHL and the NBA. The effects could be wide-ranging, from how fans watch their favorite teams to how much players get paid.
The games of just about every MLB, NHL and NBA team are shown on regional sports networks (RSNs). It’s an arrangement that has proved extremely lucrative over the past three decades and accounts for a significant share of the revenue for every team.
But stresses on the traditional model have reached an inflection point as Americans leave the cable bundle, streaming services battle for survival and teams try to maximize their media rights dollars.
To understand what is happening today, it helps to understand the networks’ origins. For the first three-quarters of the 20th century, teams made most of their money at the ballpark — in ticket sales, concessions and the like. Games weren’t even reliably on TV.
Some baseball teams were on broadcast TV most of the summer, others barely at all. Some teams didn’t want to show home games because they worried people wouldn’t buy tickets. (The Chicago Blackhawks, the last team to do away with the strategy, finally put their home games on TV in 2008.) Broadcast networks also didn’t want to preempt popular weeknight TV shows because they drew more viewers.
Pay TV, or what would become known as cable, was a game changer for sports, but it happened slowly. The first cable networks debuted in the middle of the 20th century, with teams experimenting with different strategies. When the Brooklyn Dodgers contemplated a pay-per-view system, charging fans 50 cents per game in the 1950s, Edward R. Murrow invited Dodgers owner Walter O’Malley onto his CBS television show to discuss the impact of moving baseball games off free television.
In 1979, when ESPN and CNN launched the cable era, local sports were crucial to the growth of the medium. Cable operators wanted content to lure subscribers away from free TV, and teams wanted more money. Some of the efforts were successful, while others weren’t.
The Chicago White Sox tried to move their games to pay TV in the early 1980s but could only get 5,000 sign-ups for their new platform, resulting in a hodgepodge effort to televise games for several seasons. The Detroit Tigers launched a cable network in the early 1980s, and subscriptions jumped 60 percent after the team enjoyed several successful seasons in the middle of the decade, including winning the 1984 World Series.
SportsChannel New York launched in 1979 and looked a lot like a modern RSN, airing games for multiple teams. More SportsChannel networks launched in the 1980s and early 1990s, in markets such as San Francisco, Chicago, Philadelphia and Los Angeles. By 1996, Fox Sports had launched a string of RSNs across the country, and by the end of that decade just about every market had some form of an RSN.
Throughout the 1990s, many teams split their games between the ascendant RSNs and a broadcast TV partner, which led to a spike in rights fees for teams. But as the number of homes with cable kept rising, more games migrated to RSNs and the value of rights deals skyrocketed. One major factor in the rising money: Most cable subscribers paid for these networks regardless of whether they watched sports.
TV rights deals, then and now
The average annual value of teams’ most recent deals compared to their previous ones in millions of dollars.
Chicago Cubs
2004-2020
60
2020-2032
132
Brooklyn Nets
2011-2017
19
2017-2033
$49m
Source: S&P Global Market Intelligence plus other
news reports
THE WASHINGTON POST
TV rights deals, then and now
The average annual value of teams’ most recent deals compared to their previous ones in millions of dollars.
Chicago Cubs
2004-2020
60
2020-2032
132
Brooklyn Nets
2011-2017
19
2017-2033
49
Source: S&P Global Market Intelligence plus other news reports
THE WASHINGTON POST
TV rights deals, then and now
The average annual value of teams’ most recent deals compared to their previous ones in millions of dollars.
0
30
60
90
120
150
60
Chicago
Cubs
2004-2020
132
2020-2032
19
Brooklyn
Nets
2011-2017
49
2017-2033
Source: S&P Global Market Intelligence plus other news reports
THE WASHINGTON POST
And unlike for the NFL, local sports networks make up the vast majority of the viewing for these leagues. Their national telecasts, especially the NHL’s and MLB’s, don’t draw the same audiences as the NFL’s.
Where fans watch
Unlike in the NFL, more MLB, NBA and NHL games are consumed on RSNs than on national TV.
NBA
43%
RSN
28%
TNT
20%
ABC
9%
ESPN
NHL
78%
RSN
14%
ESPN
9%
TNT
MLB
83%
RSN
6%
ESPN
5%
MLB
FOX 4%
FS1 1%
TBS 1%
Source: Playfly Sports
THE WASHINGTON POST
Where fans watch
Unlike in the NFL, more MLB, NBA and NHL games are consumed on RSNs than on national TV.
NBA
43%
RSN
28%
TNT
20%
ABC
9%
ESPN
NHL
78%
RSN
14%
ESPN
9%
TNT
MLB
83%
RSN
6%
ESPN
5%
MLB
FOX 4%
FS1 1%
TBS 1%
Source: Playfly Sports
THE WASHINGTON POST
Where fans watch
Unlike in the NFL, more MLB, NBA and NHL games are consumed on RSNs than on national TV.
NBA
43%
RSN
28%
TNT
20%
ABC
9%
ESPN
NHL
78%
RSN
14%
ESPN
9%
TNT
MLB
83%
RSN
6%
ESPN
5%
MLB
FOX 4%
FS1 1%
TBS 1%
Source: Playfly Sports
THE WASHINGTON POST
Today, though, there remains a basic math problem. As these deals escalated in value over the past decade, the networks paying the fees started to lose subscribers, and those losses worsened as cord-cutting accelerated in recent years.
The company most affected has been Bally Sports, which is owned by a subsidiary of Sinclair Broadcast Group. Sinclair took on around $8 billion in debt to buy around 20 networks in 2019. Bally Sports owned the rights to 42 MLB, NBA and NHL teams before its bankruptcy filing.
Bally networks map
Dots indicate the cities where the networks are based.
RSN subscriber losses
Losses from 2019 to 2022. Average subscribers in millions.
8.1
8.0
5.6
YES Network
5.2
Bally Sports Southwest
4.6
3.7
Bally Sports West
3.3
3.2
2.7
NBC Sports Chicago
2.4
NBC Sports Philadelphia
2.3
1.8
Bally Sports Detroit
1.9
Bally Sports Arizona
1.1
2019
2022
Source: S&P Global Market Intelligence, Bally Sports
THE WASHINGTON POST
Bally networks map
Dots indicate the cities where the networks are based.
RSN subscriber losses
Losses from 2019 to 2022. Average subscribers in millions.
8.1
8.0
5.6
YES Network
5.2
Bally Sports Southwest
4.6
3.7
Bally Sports West
3.3
3.2
2.7
NBC Sports Chicago
2.4
NBC Sports Philadelphia
2.3
1.8
Bally Sports Detroit
1.9
Bally Sports Arizona
1.1
2019
2022
Source: S&P Global Market Intelligence, Bally Sports
THE WASHINGTON POST
Bally networks map
Dots indicate the cities where the networks are based.
RSN subscriber losses
Losses from 2019 to 2022. Average subscribers in millions.
8.1
8.0
5.6
YES Network
5.2
Bally Sports Southwest
4.6
3.7
Bally Sports West
3.3
3.2
2.7
NBC Sports Chicago
2.4
NBC Sports Philadelphia
2.3
1.8
Bally Sports Detroit
1.9
Bally Sports Arizona
1.1
2019
2022
Source: S&P Global Market Intelligence, Bally Sports
THE WASHINGTON POST
The problem transcends the Bally networks, though. Mid-Atlantic Sports Network, which is controlled by the Baltimore Orioles and broadcasts Orioles and Washington Nationals games, has felt this effect, too, which has resulted in significant cost-cutting at the network.
When people drop cable, these networks are hurt more because they are earning more money per subscriber than most other channels. And the crux of the problem, for teams and leagues moving forward, is that in any direct-to-consumer model, they will not collect fees from people who aren’t watching sports as they have done for the past three decades.
So what’s going to happen? The NBA and NHL are prepared in the short term to help Bally develop a streaming platform that fans can buy directly to help account for the drop in cable subscribers. But MLB would like to pool its own rights and sell all of its TV rights as a package, similar to what the NFL does. Despite the disruption in how games are distributed, they remain popular on local TV. The baseball season is 162 games long and accounts for the most-viewed programming in many markets over the course of the year.
The main worry for leagues and franchises is that they will never be able to replicate the reach and revenue of peak cable. In whatever model emerges, sports entities probably will have to collect more money from sports fans to account for the missing money from the non-sports fans that came from the cable bundle. And if teams want to maximize revenue, they will have to split their games among a number of services, including streaming outlets, which will make those games harder to find at a time when sports are desperate to reach younger audiences. To watch every Yankees game last year, for example, a fan in New York would have needed a cable subscription, plus subscriptions to three streaming services: Amazon Prime, Peacock and Apple TV Plus.