On Saturday morning at Michigan State’s Breslin Center, Maple City Glen Lake won its first girls state high school basketball championship since 1978.
The game, a 60-43 win over Baraga Junior/Senior High School, aired statewide live on Bally Sports Detroit, the regional sports network (RSN) that broadcasts the Michigan High School Athletic Association’s championships in football and boys and girls basketball.
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How much longer that broadcast arrangement lasts remains uncertain — a reality faced by teams and sports from the professional major leagues to the minors, colleges, high school, amateur, and recreational sports that rely on such channels nationwide.
Bally Sports Detroit is part of the family of RSNs owned by TV station giant Sinclair Broadcast Group Inc. under its Diamond Sports Group subsidiary that, as long expected, on March 14 began its insolvency protection claims in federal bankruptcy court because of billions of dollars in debt.
In Michigan, the Bally Sports channel is best known for airing live Detroit Tigers, Red Wings, and Pistons games — as its 18 Bally-branded sister channels do across the country for not only 47 major-league men’s and women’s teams, but countless minor league, college and high school sports.
With the ongoing cord-cutting trend siphoning tens of millions of U.S. households and billions of dollars out of the cable/satellite bundle that’s propped up much of sports and TV overall for decades, there’s an open question of what will replace that revenue and all those eyeballs.
Much has been written about the future of fans’ ability to watch their preferred MLB, NBA and NHL teams — leagues that have all said they have contingency plans to ensure broadcasts continue, as has Diamond — but there’s been less attention on the lower-tier sports and leagues that also rely on the RSN ecosystem to get some of their games and matches in front of people.
And it’s not just the games, in many cases. Coaches shows and pre- and postgame coverage also are part of some RSN deals for colleges and non-major league teams.
Industry observers say the fate of the regional sports networks could have a variety of effects on smaller sports properties, both bad and good, but much is still unknown both with the bankruptcy case and the evolution of consumer habits with streaming versus linear TV, and the costs for fans.
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In addition to the MLB, NBA and NHL, there are five WNBA teams that have broadcast rights deals with Bally Sports channels, and the future of those relationships is expected to piggyback whatever the NBA does with its regional sports network relationships.
“The WNBA is working diligently with all involved to assure that fans in Bally Sports markets have access to their team’s local games once the WNBA season starts in May,” a WNBA spokesperson said via email.
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Major League Soccer, arguably the fifth U.S. major league, has avoided the RSN issue altogether because a few years ago, it began reigning in its team-level broadcast deals in preparation for selling all of its media rights as a bundle — which it did last year for $2.5 billion over a decade to stream via an app within Apple TV (with a handful of matches on national linear TV on Fox platforms).
Following that lead, the National Women’s Soccer League, which had some team-level RSN coverage and national broadcast deals of varying success, announced on March 15 that all of its matches will be on CBS platforms, including CBS itself and CBS Sports Network, with most matches streamed on Paramount+.
Streaming may become the model for smaller sports properties as the RSN system continues to evolve or eventually faces extinction. The Premier Hockey Federation (formerly the Women’s National Hockey League) in late 2021 announced a multi-year deal with ESPN to stream all of its matches on ESPN+.
Other leagues, like the American Hockey League, have their games spread across a variety of providers, both local linear TV and on streaming. Like many small leagues, it streams games on its own website and app, which reaches its hardcore fans but limits wider exposure. The AHL’s Cleveland Monsters are the league’s only club with a few games on an RSN (Bally Sports Great Lakes, better known as the cable home of the Cleveland Guardians).
Many colleges and universities rely on RSNs or small local broadcast TV affiliates (along with streaming and their own social media platforms) to broadcast some of their sports. Conferences often use third parties, such as Learfield or ESPN, to arrange broadcast deals for their athletics, especially outside of football and basketball, to air on RSNs or other cable channels.
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For example, a few University of Michigan hockey games air on Bally Sports Detroit under an umbrella deal with Learfield, which was hired to handle multimedia rights sales on behalf of the university’s athletic department (which handles production of many broadcasts).
“I view them as a value-add for our local fans to augment existing coverage through Big Ten Network agreements, and we review options annually,” said UM athletics spokesman Kurt Svoboda.
Learfield provided only a brief statement: “Most of our media rights deals are more focused on radio broadcasts than TV, as most of the TV rights flow through the schools’ conference deals,” a spokesperson said via email. Learfield itself is struggling with a reported $1 billion-plus in debt since the pandemic and may end up restructured, per the Wall Street Journal.
“Learfield would be a natural player in expanding their existing reach by grabbing some of these rights that will need a new home,” said Dan Cohen, senior vice president of global media rights consulting at Octagon, which helped the NWSL with its CBS deal. “The challenge is they’re carrying a heavy debt load.”
The Atlantic Coast Conference, which has sports that air on Bally Sports South that has coverage in seven states, has a media deal with ESPN, and it’s ESPN that sublicenses them to RSNs.
Some college conferences — like the Big Ten, SEC, ACC, and Pac-12 — also have dedicated cable networks (all majority owned by media giants except for the conference-owned Pac-12 Network).
Media rights to major college sports events, such as the top football and basketball games, are sold as high-priced packages directly to the major networks. That’s akin to the NFL, which has all national TV and streaming deals except for preseason games, which teams sell on their own locally.
So what happens next?
First, the Diamond Sports RSN bankruptcy case will continue to unfold in the federal Southern District of Texas, with the company trying to reduce its team rights payments and other debt.
While there are outliers at the top and bottom, MLB teams average $85.1 million in annual RSN rights payment revenue while its $44 million for NBA teams and $19.6 million for NHL clubs per season, according to S&P Global Market Intelligence/Kagan data reported by the Wall Street Journal.
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The smaller sports are getting nothing close to that — and in some cases, nothing at all — meaning they’ll have fewer options.
“It’s definitely going to be some sort of combination between local over-the-air networks and digital streaming platforms,” Cohen said.
And with the RSN collapse occurring faster than many expected, the clock is ticking.
“Each will need to find new television homes, quickly,” said Lee Berke, president and CEO of sports media consulting firm LHB Sports, Entertainment & Media Inc.
“College and high school sports are most at risk, due to lower revenues and smaller audiences versus the pros. These two categories could be able to access local broadcast channels, including an increasing number of digital broadcast channels, and some sports, particularly football and basketball, may be able to justify low-priced streaming solutions.
“The point is that RSNs at best will become fewer in number and smaller in terms of revenues and programming. It means that many teams will have a busy spring and summer looking for new TV homes starting this fall.”
Patrick Crakes, a former Fox Sports executive, said he doesn’t think most of the games on your local regional sports network, from the major leagues to the high school games, are going anywhere.
“It’s all going to be right where it is,” he said.
That’s because the Bally Sports corporate bankruptcy is a Chapter 11 filing, which means reorganization (and restructuring of the enormous debt load) rather than everything shutting down. But that could still mean some shuffling and consolidation over the coming years.
“This is not going to be a liquidation, but that doesn’t mean things won’t change,” Crakes said. “All the programming will continue to be distributed.”
An upside for the smaller sports and leagues is that their games and content are low-cost compared to the major leagues — Diamond has nearly $2 billion in rights fees on the books for 2023 for MLB, NHL and the NBA. Nothing else comes close to such costs in their programming lineups, and the cheaper or free content fills the hours when the big leagues are not playing.
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The non-major league content generally has small audiences, too, but they’re still important to RSNs as part of their local identity and traditions. The major leagues, though, typically account for up to 90 percent of an RSN’s viewership and finances.
In the nightmare scenario of an RSN going dark entirely, the major leagues can shift to their leagues’ streaming platforms in the interim, Crakes added, but the smaller sports have fewer options for wider exposure.
“These other sports getting exposure on these RSNs have to hope they figure it out,” Crakes said. “I think they’d have to go to various digital platforms where they’d not get as much value.”
A silver lining to the RSN collapse for the smaller sports and leagues is that they’re not as financially bound to the channels. Up to 30 percent or more of a major-league team’s operating budget may come from its local RSN deal (with the much bigger national TV deals providing the bulk of their budgets).
The little leagues don’t get that sort of cash. They rely on the sale of tickets, concessions and merchandise, or athletic department subsidies. Some, like Michigan’s high school athletic governing body, do get a small rights fee for its championship games on cable.
“Because they don’t depend on rights fees for the most part, (smaller sports) must go somewhere else and try to make it work,” Crakes said. “You can make it work, it’s not the end of the world.”
The lowest tier of RSN content — syndicated lifestyle shows for outdoors enthusiasts, poker and gambling, rodeos, volleyball, etc. — has even smaller audiences and usually buys airtime on RSNs.
“That stuff will go find another place to live. They’re writing the check to get on the network,” Crakes said.
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Ed Desser, a former NBA senior executive who has negotiated TV rights deals for teams across several major leagues and organizations, said that with the economic pressures on the RSN corporate parents, the need for content could benefit the smaller sports properties.
“To some extent, as costs must be cut, there may be added demand for low-cost programming, particularly of local relevance, though I would not expect that to lead to improved economics for those properties but might lead to better time slots and more coverage time,” Desser said.
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Better time slots are a win for the smaller sports, but they still face the potential loss of the RSNs entirely if things continue to get worse economically for the networks. Warner Bros. Discovery has threatened to walk away from its small number of RSNs, which has the Houston Astros and Rockets reportedly in talks to buy WBD’s AT&T SportsNet Southwest.
And cost-cutting can have a downside for middle- and lower-tier sports, too, because some of those costs could shift from the RSN to the league or college.
“Cost-cutting runs deep, and that means opportunities for other sports will be affected,” said Curt Pires, founder and president of media management and consultancy CAP Sports Group. “The RSNs need to fill their programming lineups beyond their pro teams and will look for deals that make financial sense. The rub will be, are these opportunities which once came with rights fees and production reimbursements now time-buys or no compensation?”
Production costs shifting from RSNs to lower-tier sports properties can add a new financial strain to the teams, leagues, and sports, too.
“One of the key considerations here is that for all of these properties, high school or college, it created a tremendous opportunity in sponsorship and ad sales,” Octagon’s Cohen said. “But who fills the void to handle that? Agencies?”
Losing their RSN homes can also mean a loss of reach for sports that continually seek more fans to survive or grow (or, in the case of colleges, get in front of alums, donors and potential recruits).
“It limits exposure of teams and leagues to the broadest set of the most (dedicated) fans. The casual fan is really lost,” said Brandon Ross, partner and a media and tech analyst at LightShed Partners. “The person that might stumble upon the WNBA game or high school sports championship and watch it and potentially want to watch again, is now lost.
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“You need to generate as many fans for your sport as possible. You want continuous reinforcing loops to keep your sport healthy.”
A move from linear cable TV to streaming has pitfalls because users cannot scroll channels like they do, at least for now, with cable and satellite channels. Some organic discovery is lost in the current streaming era, and the major streaming providers are largely national rather than regional or local in nature.
“My fear is these teams and leagues end up being orphaned with no home,” Ross said. “Streaming services invest in sports of all kinds, but what you haven’t seen is any kind of localization strategy.”
Streaming hasn’t been the savior many expected it to be, at least not so far. None of the major services are profitable, with losses in the hundreds of millions of dollars subsidized by the rest of the company’s strained profits.
Diamond Sports Group rolled out a streaming app for some of its teams, at a $20 monthly cost — something that failed to offset bankruptcy and is indicative of the costly retail pricing that is tough on many consumers and prevents scaling to offset the cord-cutters. While Diamond is the country’s largest RSN company, there are a handful of smaller groups and team-owned channels, such as MSG Networks, which airs Knicks and Rangers games and is rolling out its own $30 monthly streaming service this summer.
How small leagues and sports could stream at a lower cost while scaling up without losing audience and revenue is a bit of a grail quest, much as it remains for the big leagues.
Meanwhile, back in Michigan, the state’s high school athletic association is at least thinking about the possibility of a post-RSN world while expressing belief that its championships will remain on Bally Sports Detroit.
“We’re also confident the relationship with (Bally Sports Detroit) with continue in the future,” said Jon Ross, the MHSAA’s director of broadcast properties, via email. “If they ever did cease to operate, we would consider alternate options to broadcast our games throughout the state but again, after our conversations with BSD about what’s currently taking place, we’re confident we will be able to continue working with them in the future.”
(Photo of Dylan Duke of the Michigan Wolverines’ men’s hockey team, one of the many non-major teams with a broadcast presence on Bally Sports: Dave Reginek / Getty Images)