How regional sports networks’ financial troubles could impact NBA teams and fans

The NBA has not been untouched by the recent turmoil that has hit regional sports networks across the country. The league has felt it as acutely as any other North American professional sport. In all, 18 teams have contracts with RSNs whose short- and long-term futures are uncertain, between the upheaval with Diamond Sports Group and Warner Bros. Discovery.

Diamond Sports has deals with 16 NBA teams across the country through its Bally Sports networks. Tuesday, the company filed for Chapter 11 bankruptcy, as it was expected to.

NBA commissioner Adam Silver has expressed optimism that games on those networks will still get on TV for the rest of this season. He has said the league has had talks with Diamond about restructuring its contracts. Last month, at All-Star weekend in Salt Lake City, Silver said he was not concerned about the short term impact to teams. That was reiterated by the league Tuesday night too.

“Diamond’s bankruptcy filing was expected and we remain committed to ensuring that NBA fans in the markets served by Bally Sports have continued access to all local games,” NBA spokesperson Mike Bass said.

But two other teams might be more affected than the ones under local rights deals with Diamond Sports. The Houston Rockets and Utah Jazz each have deals with AT&T SportsNet RSNs in their local markets, both owned by Warner Bros. Discovery, which said last month that it intends to get out of the RSN business by the end of March. That timing is precarious.

While the Rockets will miss the playoffs, they still have four games in April before the season concludes. The Jazz have five games next month and still have an opportunity to make the postseason (they’re a game out of the final Play-In spot in the West).

Both teams have plans to maintain the status quo for the rest of this season despite this disruption in the RSN industry. Rockets games are still expected to air on AT&T SportsNet SouthWest. Jazz games will still air on AT&T SportsNet in the Utah market for the duration of this season too. If no deal to broadcast games on air has been reached, then the NBA might consider lifting its NBA League Pass local blackouts as a backup plan.

“No change in the way that Jazz fans consume their games through the end of the 2022-23 season,” Jazz chief communications officer Caroline Klein said.

The Jazz were already looking for a new broadcast partner next season, Klein said, since their contract with AT&T SportsNet was set to expire after this season. Because of that, Klein said, the franchise did not receive a letter from the network announcing its intention to get out of the RSN business, as others had according to The Wall Street Journal, which reviewed a copy of that letter.

The turmoil in the RSN industry over the last few months is just the latest sign that teams will have to be prepared to change how their games are broadcast locally in future seasons. While local media rights fees are not as large as the national media rights fees the league is currently earning, and even smaller than what it is expected to get in its next media rights deal, they have still been a bedrock for teams.

There has already been some inkling of how the local broadcast could change in years to come. MSG Networks, which broadcasts the New York Knicks, Rangers, Islanders, Devils and Buffalo Sabres, is set to launch MSG+, its own direct-to-consumer product, this summer that will allow consumers to buy subscriptions by the year, month and individual game — a monthly plan is set to cost $29.99, while a game will cost $9.99. Madison Square Garden owns the Knicks and Rangers, and the network that airs their games.

Monumental Sports and Entertainment, which owns the Washington Wizards, Capitals and Mystics, just bought its regional sports network, NBC Sports Washington, from Comcast in August.

Teams without their own RSNs will have to make their own plans. The Rockets and Astros, whose games are also broadcast on AT&T Sportsnet Southwest, have been working together to buy the RSN and take it over, a league source said. A spokesperson for the Rockets declined to comment for this story. Warner Bros. Discovery offered to let teams take ownership of their RSNs in the letter the company sent to them last month.

The uncertainty in the RSN market could create a shift from them altogether.

“The goal is to not have to rely on these big companies,” said one team president, who was granted anonimity so that he could speak freely. “You get a big rights fee and that’s great but we’ve watched those companies nose dive over the last few years. … Now it’s only gotten worse because fans don’t want cable or satellite, they want it on YouTube or Hulu or whatever.”

Klein said the Jazz are well situated to handle whatever the next steps will be for how the team broadcasts games and were not surprised by AT&T’s announcement. Utah is one of the handful of NBA teams that handles its own production, paying for the workers who get games on air and the production costs — others include the Portland Trail Blazers, who are on Root Sports Northwest, which is partially owned by Warner Bros. Discovery and unaffected by their plans.

Klein also stated that the Jazz had already been having discussions over the last few months about their broadcast plans for next season, and the franchise has been in talks with new “partners and platforms” about where to air games for the 2023-24 season.

The Jazz intends to have a hybrid approach next season. The team wants to marry a broadcast on TV and a direct-to-consumer option to reach fans who prefer one or the other. If the Jazz went only to a direct-to-consumer broadcast, Klein said, the team would alienate a majority of its viewers, who still want to watch games on linear TV.

“We’ve been exploring those over the past few months,” Klein said. “We’re very conscious of the way fans want to consume games having rapidly evolved and we’re looking at things that are different than the traditional RSN model.

“And really just speak to what our fans want for the ’23-24 season that speak to some of the things we identified as priorities at the beginning of the season, in terms of distribution and fan experience. And the ability for that direct-to-consumer streaming option.”

Silver said he isn’t that concerned long term about how teams broadcast games because of a mix of linear and digital options available to the NBA’s franchise.

The future of local broadcast could include teams finding homes on local broadcast network affiliates again, to maximize audience and limit volatility, even if it also came with smaller local media rights fees. That would come alongside their own direct-to-consumer offerings. Silver has in the past mentioned an in-market version of League Pass.

“We’ve all just been taking the money for years at some expense to the access of games for fans, and now we’re being forced to probably put the fans first,” the team president said. “Which might not be a bad thing.”

(Photo of Bally Sports logo: Jerome Miron / USA Today)