Cable cutters threaten regional sports networks
In March, Diamond Sports Group, the largest owner of regional sports networks, filed for Chapter 11 bankruptcy. Alexander Hassenstein/Bongarts via Getty Images
As consumers cut cable services in favor of streaming platforms, regional sports networks risk going under. In the first quarter of 2023, approximately 2.3 million Americans dropped traditional cable plans. And as more Americans turn to streaming platforms, these regional cable networks are losing more money.
“Marketplace” host Kai Ryssdal spoke with Ben Strauss, sports and media reporter for The Washington Post, about how regional sports networks are faring as more and more Americans go through the cable, and what it 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: These are cable networks that for the past 20 to 30 years have shown just about every one of your favorite baseball, hockey, and NBA teams.
Ryssdal: And regional, as that implies, is not a national thing. It’s every region, you know, there’s a network for every region and every team, right?
Strauss: Exactly. Thus, the Dallas teams are on a single network. In Chicago, until recently, the Cubs and White Sox and the Bulls and Blackhawks were on the same network.
Rysdal: Alright. And the point of this article, and the thing that can actually change sports, as we kind of know, is that these regional sports networks basically go bankrupt.
Strauss: Basically, they’re in big trouble. Essentially, as people leave cable, the fees that they were paying to those networks that those networks were in turn paying to those teams go down dramatically. And one of the major owners of these networks, a company called Diamond Sports, filed for bankruptcy protection earlier this year. And there are teams that haven’t received payment for their rights, potentially changing the landscape of the sport.
Ryssdal: So the leagues have a vested interest in saving these regional sports networks. What are they doing?
Strauss: So different leagues do different things. Different teams, in fact, do different things. Baseball doesn’t believe in this company – this Diamond Sports company. And so, baseball would kind of like all of these teams to take their rights off and create some kind of product that you could see on cable and could stream directly on its own. Most NHL and NBA teams would kind of like to see this model exploited for all it’s worth as long as the checks are still cashing in the next couple of years. So, it’s a bit of a hodgepodge, and we certainly don’t know how it’s going to play out.
Ryssdal: Messy sounds like a good word here, doesn’t it?
Strauss: Yes, yes, you are good at it.
Ryssdal: So listen, spare a thought for me here for the fans, who all they want to do is watch their teams, and now because streaming is up and in cable TV, and because the league wants the money, and the regional sports networks are going bankrupt, what’s a fan supposed to do?
Strauss: Well, really interesting question about being a sports fan for a while, isn’t it? One of the reasons these networks have been so valuable is that all those people who weren’t watching sports were paying for them. Everybody has a cable subscription, and everybody pays three or four or five or even six dollars a month for that regional sports network, even if they don’t watch a minute. And so, it’s kind of in this pay-per-view model where people leave the wire harness. At the end of the day, teams kind of have that choice, like do you want to reach more people, and do you think about something on TV broadcasting—which is really old school that would make games accessible to a large number of persons. Diamond fights against that. and so do you want to reach the most fans, or do you want to raise the most money by switching to a streaming service where people have to pay more to find you? And, it’s sort of this balancing act.
Ryssdal: And the catch is, you can’t have them both, can you?
Strauss: The thing is, you can’t have them both. And so ultimately, I think sports fans are going to end up paying more for their sport.