As the future of regional sports networks (RSNs) looks increasingly gloomy, the NBA’s Phoenix Suns might be the organization that changes the game between sports teams and their cable broadcast agreements.
Last week, the Suns and WNBA’s Mercury announced that they were leaving Bally Sports Arizona and moving their game broadcasts from cable to local, over-the-air TV stations owned by Gray Television. The three stations (KTVK, KPHO, and KPHE) reach 2.8 million households in the Phoenix, Tucson, and Yuma markets. Additionally, the team is partnering with interactive video company Kiswe to launch a subscription streaming platform available on the teams’ websites and apps.
For NBA fans and media wondering how new Suns and Mercury owner Mat Ishbia might change how those teams do business, walking away from an RSN and embracing local TV might be the best example yet of a bold, fresh direction. (The flashiest demonstration of a new boss in town was probably acquiring superstar Kevin Durant from the Brooklyn Nets in February.)
“I’ve said from day one that our focus is our fans, our community, and every member of our organization and this deal checks every box,” said Ishbia in a team statement announcing the deal.
“By going entirely over the air and building our own DTC product, the Suns and Mercury will now be accessible to millions more fans in Arizona and globally. Success comes from new and innovative ways to invest in our players, continue our mission to build a world-class organization on and off the floor, and make our product available to as many people as possible.”
Amid the deterioration of the RSN model, Major League Baseball clubs have gotten most of the attention on the matter. That’s surely due to Bally Sports and parent company Diamond Sports Group declaring bankruptcy in March. Fourteen teams have agreements with Bally Sports, essentially half of the league.
But Diamond Sports Group has had difficulty paying for rights fees to all 14 of those clubs. First, payments were missed to the Arizona Diamondbacks. Then reduced payments were made to the Cleveland Guardians and Minnesota Twins. Soon thereafter, the Cincinnati Reds and Texas Rangers weren’t paid as scheduled.
Faced with some teams possibly losing their local cable coverage, MLB Commissioner Rob Manfred has said the league would take over those broadcasts and stream them for free, likely on MLB.TV. But Ishbia’s move with the Suns’ local TV package might reveal another option for baseball teams whose RSN contracts might expire.
If Bally Sports Arizona no longer has Suns and Mercury broadcasts and loses the Diamondbacks due to missed payments, what content can the network offer viewers and cable subscribers during prime timeslots? (No disrespect intended to the Arizona Coyotes, but the NHL isn’t going to prop up a failing RSN. The Coyotes draw 4,600 fans per game playing on Arizona State’s campus.)
Imagine the same thing happening to Bally Sports Ohio if the network misses payments to the Guardians and Cleveland Cavaliers ownership works to create a lucrative local TV broadcast package like the Suns have. What would the future of Bally Sports North be if the Twins and Minnesota Timberwolves looked elsewhere for their game telecasts?
Previously, leaving an RSN might not have seemed like a viable decision. (Unless the RSN went out of business, of course.) And those networks will surely fight to stay alive. But the Suns and Mercury have shown that returning to local broadcast television might be the best move that reaches the largest audience as increasing numbers of viewers cut the cord with cable and satellite service.
Ishbia believes other sports teams will eventually follow his lead.
“Cable subscriptions are going down in the country, and so you don’t want to have less fans watching your product,” the Suns owner told Boardroom’s Shlomo Sprung (via Awful Announcing).
“So, how do you fix that? How do you solve for that? The reality is yes, I think others will follow. I think this is the way it’s going to go in the future. We’re going to change the game a little bit.”
Yes, perhaps this was an easier decision for a billionaire whose net worth is $7.2 billion, according to Forbes. Ishbia purchased the majority stake in a $4 billion sale of the Suns and Mercury, an NBA record-high. According to ESPN’s Brian Windhorst, the Suns could lose tens of millions during the early years of this arrangement. Ishbia can withstand that hit.
Others might not be willing or able to take such a plunge when millions of dollars could still be available. No matter how wealthy, some sports team owners won’t risk losing so much in guaranteed revenue. But that money won’t be there if RSNs go out of business.
Streaming alone won’t create the kind of return that lucrative cable deals offered. Baseball teams losing their RSN deals could find out quickly how many millions won’t be available to fund a competitive product. And fans will be alienated in the process as they have to pay for new, perhaps unfamiliar services.
Local, over-the-air television likely won’t offer as much money as cable. But those broadcasts will be more widely available to fans. Advertisers will pay to reach those audiences as well, knowing that viewers won’t fast-forward through commercials during live sports telecasts.
Sports on free TV? In an era when playoff games, All-Star exhibitions, and NCAA championship basketball games are on cable, that didn’t seem possible anymore. But going back to the past suddenly looks like the future for professional sports teams. The Suns and some vision from their billionaire owner are shining a light on that path.
Ian Casselberry is a sports media columnist for BSM. He has previously written and edited for Awful Announcing, The Comeback, Sports Illustrated, Yahoo Sports, MLive, Bleacher Report, and SB Nation. You can find him on Twitter @iancass or reach him by email at iancass@gmail.com.
