The decline of the regional sports network

Regional sports networks (RSNs) are television channels primarily broadcasting local sports programming within a specific geographic region. They focus on airing professional and college sports events, including games, pre- and post-game shows, analysis, interviews, and other sportsrelated content. Viewers within the regional network’s coverage area can subscribe to cable or satellite television packages that include the RSN to view live games and sports-related content. RSNs are typically affiliated with a specific sports team or league and hold exclusive media rights to broadcast their games and related shoulder programming within their designated market area (DMA).

Diamond Sports Group, a subsidiary of Sinclair Broadcast Group and the parent company of Bally Sports, purchased the RSNs from Disney as a condition from the US Justice Department upon the completion of Disney purchasing many of the entertainment assets from FOX. In February 2023, Diamond Sports Group filed for bankruptcy as the company could not service its debts and keep paying for its media broadcasting rights with many professional sports teams. The hopes were to restructure the more than $8bn of debt the company took on upon purchasing the RSNs from Disney in 2019.

Viewing habits

This sudden downturn in the RSN business model can be attributed to a significant shift in how people consume content. Many customers are canceling their cable subscriptions to sign up for streaming video services such as Netflix, Amazon Prime Video, YouTube TV, and Hulu Live. Diamond Sports Group has been building a direct-to-consumer streaming platform in response to this shift in viewing habits. However, it has only secured the streaming rights for five Major League Baseball (MLB) teams so far, and MLB has been reluctant to hand over any additional streaming rights to the remaining teams.

A US bankruptcy judge in Houston, Texas, ruled in favor of MLB and four of its teams, forcing Diamond Sports Group to pay the existing contracts to the teams in question in full. Diamond Sports Group had hoped to pay less than the contracted rate because cord-cutting and streaming had devalued the assets the federal judge had struck down. In another development to this ongoing story, MLB took over the broadcasts of the San Diego Padres when Diamond Sports Group failed to make a media rights payment. MLB has been streaming the games for free for fans in the market over its MLB.TV platform while cutting local TV deals with pay-TV operators. The same situation is happening with the Arizona Diamondbacks and other MLB teams who have media rights payments due.

Michael Frank, is principal analyst, sports media at Omdia.