Cable cutters threaten regional sports networks
In March, Diamond Sports Group, the largest owner of regional sports networks, filed for Chapter 11 bankruptcy protection. Alexander Hassenstein/Bongarts via Getty Images
As consumers ditch cable services in favor of streaming platforms, regional sports broadcasters risk going under. In the first quarter of 2023, an estimated 2.3 million Americans gave up traditional cable packages. And as more Americans switch to streaming platforms, those regional cable networks are losing more money.
Marketplace host Kai Ryssdal spoke to Washington Post sports and media reporter Ben Strauss about how regional sports networks are faring as more Americans go cable-free and what that could mean for sports fans across the country.
The following is an edited transcript of their conversation.
Kai Ryssdal: For those who may not know, what exactly are regional sports networks?
Ben Strauss: They’re cable channels that have shown just about every one of your favorite baseball, hockey and NBA teams for the last 20 to 30 years.
Ryssdal: And regional, as it implies, is not a national thing. It’s every region, you know, there’s a network for every single region and every team, right?
Strauss: Exactly. So the teams in Dallas are in a network. In Chicago, until recently, the Cubs and White Sox and the Bulls and Blackhawks were on the same network.
Rysdal: OK. And the point of this article, and what can actually change sport as we know it, is that these regional sports networks are basically going bust.
Strauss: They’re basically in big trouble. Essentially, when people leave the cable network, the fees they paid to those networks, which those networks paid to those teams, drop dramatically. And one of the leading owners of these networks, a company called Diamond Sports, filed for bankruptcy earlier this year. And there are teams who have not received their rights payments, potentially changing the landscape of the sport.
Ryssdal: So the leagues have a vested interest in saving these regional sports networks. What are you doing?
Strauss: So different leagues do different things. In fact, different teams do different things. Baseball doesn’t believe in this company — this Diamond Sports company. And so baseball wants all of these teams to rescind their rights and come up with some sort of product that you could see on cable and then stream right out of the box. Most NHL and NBA teams would love to see this model fully utilized as long as checks continue to be cashed for years to come. So it’s a bit of a hodgepodge, and it’s certainly not certain how it will play out.
Ryssdal: Chaotic sounds like a good word here, doesn’t it?
Strauss: Yes, yes, you are good at that.
Ryssdal: So think about the fans who just want to watch their teams and now that there’s streaming on cable and the leagues want money and the regional sports networks want money going broke what’s a fan supposed to do?
Strauss: Well, that’s really an interesting question as to how you can be a sports fan lately, isn’t it? One of the reasons these networks were so valuable is because all these people who didn’t watch sports were paying for them. Everyone has a cable subscription, and everyone pays three, four, five, even six dollars a month for the local sports channel, even if they don’t watch a minute. So, with this à la carte model, people leave the cable bundle. Ultimately, the teams have a choice: do you want to reach more people and think about something on TV? This is a really old fashioned thing that would make the games accessible to a large number of people. Diamond fights it. And do you want to reach the largest possible number of fans, or do you want to make the largest possible amount of money by switching to a streaming service where people have to pay more to find you? And it’s kind of a balancing act.
Ryssdal: And the catch is, you can’t have both, right?
Strauss: The catch is that you can’t have both. So ultimately, I think sports fans will end up paying more for their sport.