Is the Bottom Falling Out of Sports?

 

Back in September it was rumored that three of the four major professional sports leagues were poised to purchase the faltering regional sports networks (RSN) owned by Sinclair Broadcasting and operating under the name of Bally Sports. A couple of days ago, The New York Post reported that deal is unlikely to happen.

First, a little background: The RSNs were born in the 198os primarily as a joint effort between Cablevision and NBC. They would eventually morph into Fox Sports Net and then would pass through the hands of Disney/ESPN and eventually emerge as Bally Sports. (There were other entities involved along the way such as Liberty Media/Prime Ticket but those are the basics.)

In the beginning, their primary competition were local broadcasters – mostly independent stations who could accommodate a schedule of games without worrying about bumping network programming. In most markets, pro teams had an over-the-air home and a cable home. Then the cable nets decided they wanted the whole slate and pushed the local broadcaster out of the picture. In turn, they were more than happy to pass the costs of the increasing rights fees to the cable companies and they happily passed it on to consumers. But the consumers started to object, especially those that weren’t interested in watching and therefore had no need to pay higher bills.

Now it looks like the bottom is falling out. The leagues want the checks but they want the operation of the RSNs to be someone else’s problems. Sinclair has signed some stupid contracts because they didn’t want the teams forming their own networks like the Yankees and Red Sox did. If Sinclair ends up in bankruptcy court, some of those contracts could be altered or abolished. Money that teams were counting on for payroll might no longer be there. Watch the San Diego market carefully. Media analysts are pretty much in agreement that it is next to impossible for Sinclair to turn a profit on the contract they currently have with the Padres. And the soft ad market is going to make it worse. Reportedly, MLB has told the MLB Players Association to expect belt-tightening.

Amazon Prime signed a deal for exclusive carriage of select Yankee games. The leagues are looking to leave cable in the dust the way they left terrestrial broadcasting. Streaming video makes more sense at this point. You don’t need to program the other 21 hours of the day. The question is, are there enough fans to pay what the leagues are accustomed to receiving?

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  1. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    When is MLB.com going to allow me to pay them an annual fee to stream the games of my local team?  I can stream all the games I’m not interested in, but not the ones I actually want to watch.

    • #1
  2. thelonious Member
    thelonious
    @thelonious

    A whole lotta money has been thrown around this offseason on free agents. The Padres along with many other teams bloated their payrolls to astronomical levels. Were they aware of the potential problems they may have with their cable packages?

    • #2
  3. EJHill+ Podcaster
    EJHill+
    @EJHill

    Miffed White MaleWhen is MLB.com going to allow me to pay them an annual fee to stream the games of my local team? I can stream all the games I’m not interested in, but not the ones I actually want to watch. 

    The short answer is “never.” The RSN’s pay all the production costs so in return they demand market exclusivity. MLB.com literally “steals” the games and resells them to out-of-market consumers. If you live in Iowa and watch the Braves it is pure profit for MLB. They do not share that with the RSNs. Like-wise their deal with foreign streamers/broadcasters and ESPN+.

    Sinclair is trying to restructure their carriage agreements with their local cable affiliates to allow direct-to-consumer sales to phone apps. 

     

    • #3
  4. Red Herring Coolidge
    Red Herring
    @EHerring

    I always wondered how local stations charged cable and satellite a fee to broadcast their channels. Stations spent a lot of money on equipment and manpower to broadcast their signal. Cable and satellite companies should have offered to broadcast them for free and TV stations should have jumped on it. Instead, they charge and the cost is passed on to consumers. Maybe it covers the cost of the uplinks to the companies.

    I like all the streaming options SEC offers through ESPN. I hate having to re-enter my passwords every so often.

    • #4
  5. EJHill+ Podcaster
    EJHill+
    @EJHill

    thelonious: Were they aware of the potential problems they may have with their cable packages?

    Probably not. That would require ownership to understand the basics of television economics. Most of them don’t even understand the basic economics of their sports. (If they did they wouldn’t be team owners.)

    Here’s a telling anecdote: Larry Dolan is principle owner of the team formerly known as the Indians. His brother is Charles Dolan, owner of the Knicks and NY Rangers and was the founder of Cablevision and HBO. That family knows a thing about TV. Because the team formally known as the Indians weren’t getting what they thought they should from their local television deals they left Fox SportsNet and created SportsTime Ohio. After operating that for about three years they could not wait to bail and sell the network to Fox. Fox would sell to Disney and the DoJ forced the sale to Sinclair. If the people who understand the business don’t really want to be in the business, what does that tell you?

    • #5
  6. Barfly Member
    Barfly
    @Barfly

    Bally used to be one of the big three makers of pinball machines. I don’t care too much about baseball, but pinball is another matter entirely.

    • #6
  7. MWD B612 "Dawg" Member
    MWD B612 "Dawg"
    @danok1

    EJHill+ (View Comment):
    Sinclair is trying to restructure their carriage agreements with their local cable affiliates to allow direct-to-consumer sales to phone apps. 

    Sinclair added DTC to their Ballys’ Sports app to allow fans without cable to watch their local teams. Here in NC one can pay $20/month to watch the Hurricanes, Hornets, and Braves. Fans who tried it say the app is garbage. As a result, I sail the high seas to watch Canes games.

    • #7
  8. Mark Camp Member
    Mark Camp
    @MarkCamp

    How the heck do people who understand this industry know all this stuff?

    You, Holman Jenkins at the Wall St. Journal, etc.

    I can’t even figure out how to turn on a game.  It’s been this way for 10 years, at least.

    Do you know Andy from The Detectorists? Remember where he left a pathetic message on Becky’s phone?  She just couldn’t leave him!   He wouldn’t know what to do, without her in his life.  He has three remotes and he doesn’t know how to turn the telly on.  No, he didn’t mean that, he doesn’t care about the telly.

    That’s I.

    PS: If you don’t know The Detectorists, please don’t ask me if it is on the Streaming, or the Hula, or Federal Express Prime.  I am telling you: I don’t even know what these things are!

    • #8
  9. EJHill+ Podcaster
    EJHill+
    @EJHill

    Red Herring : I… always wondered how local stations charged cable and satellite a fee to broadcast their channels. Stations spent a lot of money on equipment and manpower to broadcast their signal. Cable and satellite companies should have offered to broadcast them for free and TV stations should have jumped on it.

    Why should cable companies be allowed to pick television signals out of the air and rebroadcast them for free? That’s theft of intellectual property. And that’s exactly what they used to do until the National Association of Broadcasters convinced Congress to intervene.

    Now stations have their choice: Must-carry status or retransmission. In some markets, retransmission fees are producing more revenue than local ad sales.

     

    • #9
  10. EJHill+ Podcaster
    EJHill+
    @EJHill

    Mark CampHow the heck do people who understand this industry know all this stuff?

    You, Holman Jenkins at the Wall St. Journal, etc. 

    I guarantee I am a rarity. Few people who work in my business who’s not at the business manager/general manager level really understands this stuff.

    • #10
  11. The Great Adventure Inactive
    The Great Adventure
    @TGA

    None of it matters  anymore.  My interest in watching sports had dwindled to college football.  Then along comes the College Football Playoff (the talking heads can talk of nothing else), the transfer portal, NIL, and coach poaching (let’s hire  our  new  coach before we  even fire our  old one). 

    Buh bye.

    • #11
  12. Mark Camp Member
    Mark Camp
    @MarkCamp

    The Great Adventure (View Comment):

    None of it matters anymore. My interest in watching sports had dwindled to college football. Then along comes the College Football Playoff (the talking heads can talk of nothing else), the transfer portal, NIL, and coach poaching (let’s hire our new coach before we even fire our old one).

    Buh bye.

    Yeah, more and more I get my sports news off the Web.  Mainly from a blogger I follow,  Three-Year Letterman.  He’s got the sports credentials, which so many talking heads don’t.   First, he’s a youth football coach who, I’ve heard, has so many championship rings that he literally can’t turn doorknobs. Also, he’s a famous Little League umpire, which means he has real-world experience.

    • #12
  13. DonG (CAGW is a Scam) Coolidge
    DonG (CAGW is a Scam)
    @DonG

    Barfly (View Comment):

    Bally used to be one of the big three makers of pinball machines. I don’t care too much about baseball, but pinball is another matter entirely.

    I think they make their money from Casino’s and sports gambling now.  Broadcasting sports would seem to be a smart cross promotion.

    • #13
  14. DonG (CAGW is a Scam) Coolidge
    DonG (CAGW is a Scam)
    @DonG

    Thanks @ejhill for explaining how things are.  How do you things will look in 10 years?   Will Football have a “December Madness”?   Will fewer schools split bigger dollars?   Will pickleball and cornhole replace the traditional money sports?

    • #14
  15. EJHill+ Podcaster
    EJHill+
    @EJHill

    Bally’s just bought the naming rights. It has no real interest in the network.

    • #15
  16. Mark Camp Member
    Mark Camp
    @MarkCamp

    DonG (CAGW is a Scam) (View Comment):

    Thanks @ ejhill for explaining how things are. How do you things will look in 10 years? Will Football have a “December Madness”? Will fewer schools split bigger dollars? Will pickleball and cornhole replace the traditional money sports?

    Will Christopher Guest write This is Pickleball?  Will Eugene Levy reprise his Best in Show role, as a Pickleball player with, literally, two left feet?

    We saw a serious documentary on the TV about pickleball last night.  I’m not kidding. They weren’t kidding, I don’t think: the commentators seemed as authentic as dog expert Trevor Beckwith and “color” commentator Buck Laughlin in Best in Show.

    • #16
  17. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    One can hope so. I’d love nothing better than to see someof these people lose money

    • #17
  18. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    EJHill+: The question is, are there enough fans to pay what the leagues are accustomed to receiving?

    I wouldnt think so.  ESPN subscriber rates have been falling faster than cable disconnects.

    Following 1 team might be a good model for a lot of fans – but they should also have a floater packages, were a fan could pick the a set number of games to watch live each week. and any game the day after… So you would pay your monthly subscription rate for say 4 live games a week – but also have the ability to watch any game the day after it was played… So that a fan could watch the most meaningful games (to them) of the week, plus go back and watch games were unexpectedly great – or became controversial…

    I think over the long run, streaming is going to do to video entertainment, what streaming did to the music industry. I think the days of the $100 million blockbuster movie are numbered, as well as the Billion dollar sports rights packages the leagues auction off to the broadcasters.

    • #18
  19. Mark Camp Member
    Mark Camp
    @MarkCamp

    Bryan G. Stephens (View Comment):

    One can hope so. I’d love nothing better than to see some of these people lose money

    Which one?  Eugene Levy, or Buck Laughlin?

    Not Carl Reiner, surely!

    • #19
  20. BDB Inactive
    BDB
    @BDB

    EJHill+: Is the Bottom Falling Out of Sports?

    Were you watching Italian women’s pole vault?

    • #20
  21. Duane Oyen Member
    Duane Oyen
    @DuaneOyen

    Most of the conversation is about baseball, which has been hemorrhaging fans for decades, ever since un restricted free agency made it virtually impossible to identify with a set of players over a term longer than a year, especially in non-major markets.  So no one cares a whole lot any longer?  Why would that be a surprise?  Who wants to subsidize some mediocre pitcher’s 10 year guaranteed contract for $250 million, and listen to him whine about it?  

    And the per-subscriber rights fees for RSNs  are ridiculous.  Your cable bill is up 1/3 over the alleged monthly cost with those tack-on fees strategically named to disguise where the money goes. 

    At some point the endemic greed will have alienated every former fan.  College football will quickly blow up over payment of players, ending the myth of “amateur athletics”.  The NFL is still fun to watch most of the time; we’ll see how long that lasts.

    • #21
  22. BDB Inactive
    BDB
    @BDB

    I was a Raiders fan since I won $20 as a kid.  I became a Packers fan due to a forcible conversion during quarterfinals in Green Bay.  Fun story.  You cannot buy a belt at the mall in that town when the game is on.

    Never gave a hoot for baseball, basketball, or anythingelseball, and absolutely no college anything.

    The NFL got squishy, and then woke, and that was that.  Meanwhile, Nick Diaz got me into UFC.  Clay Guida, Roy Nelson, Dan Henderson; that crew.  Paid for the ufc.tv thing.  Then the UFC got in bed with woke ESPN and charged a hundred dollars a year for junk I don’t like presented by idiots I can’t stand just to be ELIGIBLE to buy each PPV separately, and not for small money.  Screw it.

    I hope the whole sports world goes broke and dies in jail.  You won’t see me crying over young athletes anymore — get the trannies and the take-a-knee garbage sorted and maybe I’ll care.  Until then, it’s doing more harm than good anyway.

    Sports is not what it was, and these young people will get enough exercise in the next war.  Maybe when they execute us all.

    • #22
  23. BDB Inactive
    BDB
    @BDB

    Duane Oyen (View Comment):
    College football will quickly blow up over payment of players, ending the myth of “amateur athletics”.

    Well said:

    • #23
  24. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    Duane Oyen (View Comment):
    At some point the endemic greed will have alienated every former fan

    Then it can die.

    Good good good.

    The money paid is obscene. Sickness of our culture. 

    • #24
  25. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    Just because this doesnt really belong anywhere else: (but just funny)

    • #25
  26. Gazpacho Grande' Coolidge
    Gazpacho Grande'
    @ChrisCampion

    The Red Sox/NESN (New England Sports Network) piece of this is interesting, but I admit to knowing jack about how all of it works.  NESN also did the Bruins games, bunch of college sports, etc.  

    But I was slavishly devoted to watchin NESN and the Sox a couple decades back – not quite every game, or every pitch, but maybe 75% of ’em.  Now I watch zero sports, unless it’s like a football game at App State where my step-daughter goes to college, and we picked up ESPN + just to watch an away game when she was home for a weekend.

    I see all the games now offered on Amazon, and I’d easily go that route on a per-game purchase, if I wanted to watch something.  The model for how this works, in terms of revenue sharing across the different leagues (NFL, NHL, MLB, NBA, pick one), the blackouts in local coverage, that kind of thing – used to be of more interest because revenues enable higher salaries for the best players, etc.

    But what comes to mind, when I think of all this, is Jack Clark.

    https://www.latimes.com/archives/la-xpm-1990-12-15-sp-5802-story.html

    Wiki:  Clark returned to the American League in 1991, signing with the Boston Red Sox for three years over the Padres’ offer of only one. Clark served primarily as Boston’s DH, hitting 28 home runs his first year with the team.

    After hitting only five home runs in a truncated 1992 season, Clark was waived by Boston in February 1993 and was signed to a minor league contract by the Montreal Expos during 1993 spring training.  He was released later that year without appearing in a regular season game with the Expos, and retired shortly thereafter.

    This was a classic old-school stupid move from the GM (Lou Gorman) – buy an aging player for too much, at the tail end, and basically throw away 2 of the 3 years’ worth of the contract.  There’s a reason why the owners moved to a more modern model later on, picking up guys like Kevin Youkils in the draft, underrated but overachieving, etc, and you get more bang for your buck (see: Moneyball).

    Today, I couldn’t name one player or the coach of the Red Sox.

    • #26
  27. EJHill+ Podcaster
    EJHill+
    @EJHill

    @chriscampion NESN is owned by both the Red Sox and the BruIns.

    As for Jack Clark, that’s a sad story. He is absolutely horrible with money and his life was falling apart off the field when he signed with Boston. He has filed for bankruptcy twice. 

    • #27
  28. James Lileks Contributor
    James Lileks
    @jameslileks

    Barfly (View Comment):

    Bally used to be one of the big three makers of pinball machines. I don’t care too much about baseball, but pinball is another matter entirely.

    I have the same reaction whenever I see the name, and the familiar typeface, used in other contexts. What’s next? Gottlieb-Williams Food Network?

    (I almost wrote “Stern-Data East Food Network” for the other “big three” names  just to irritate pinball geeks)

    • #28
  29. James Lileks Contributor
    James Lileks
    @jameslileks

    Mark Camp (View Comment):

    How the heck do people who understand this industry know all this stuff?

    You, Holman Jenkins at the Wall St. Journal, etc.

    I can’t even figure out how to turn on a game. It’s been this way for 10 years, at least.

    Do you know Andy from The Detectorists? Remember where he left a pathetic message on Becky’s phone? She just couldn’t leave him! He wouldn’t know what to do, without her in his life. He has three remotes and he doesn’t know how to turn the telly on. No, he didn’t mean that, he doesn’t care about the telly.

    That’s I.

    PS: If you don’t know The Detectorists, please don’t ask me if it is on the Streaming, or the Hula, or Federal Express Prime. I am telling you: I don’t even know what these things are!

    It can be streamed free on Pluto and Tubi, although anyone with Amazon Prime can get it now with no additional signups on Freevee. It’s one my favorite TV shows ever. 

    • #29
  30. DonG (CAGW is a Scam) Coolidge
    DonG (CAGW is a Scam)
    @DonG

    OccupantCDN (View Comment):

    Following 1 team might be a good model for a lot of fans – but they should also have a floater packages, were a fan could pick the a set number of games to watch live each week. and any game the day after… So you would pay your monthly subscription rate for say 4 live games a week – but also have the ability to watch any game the day after it was played… So that a fan could watch the most meaningful games (to them) of the week, plus go back and watch games were unexpectedly great – or became controversial…

    I think over the long run, streaming is going to do to video entertainment, what streaming did to the music industry. I think the days of the $100 million blockbuster movie are numbered, as well as the Billion dollar sports rights packages the leagues auction off to the broadcasters.

    The Gen-Z folks I know either don’t watch sports or stream it without paying and not seeing commercials.  That means zero revenue, which is clearly unsustainable.   Movies in the theater and music on physical media are the same.   Anything more than a few token dollars is a non-starter.

    • #30
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