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- WBD Sports has three wholly operated RSNs
- MLB is also dealing with fallout of DSG’s bankruptcy filing
Warner Bros Discovery (WBD) Sports is nearing a deal to exit the regional sports network (RSN) business at the current end of the Major League Baseball (MLB) season, according to Sports Business Journal (SBJ).
The media giant currently operates three RSNs under the AT&T SportsNet banner – Pittsburgh, Rocky Mountains, and SouthWest. Amid a period of turmoil in the RSN business, WBD Sports indicated earlier this year that it planned to shut down the channels, claiming it did not have sufficient funds to pay upcoming rights fees.
WBD Sports has local rights deals with the National Hockey League’s (NHL) Pittsburgh Penguins and Vegas Golden Knights, the National Basketball Association’s (NBA) Utah Jazz and Houston Rockets, as well as Major League Baseball’s (MLB) Houston Astros, Pittsburgh Pirates and Colorado Rockies.
The affected teams were reportedly told they had until the end of March to reclaim these rights, without charge, in exchange for waiving the right to future legal action. That deadline has now passed without an agreement, with teams and leagues not keen on midseason disruption.
Now, according to the SBJ, a multi-faceted deal is close to being agreed. Under the proposals, MLB is said to be regaining the rights to the Pirates and Rockies with the league’s new local sports division handling both the production and distribution of live games. For the Astros and Rockets the agreement will reportedly see them take over AT&T SportsNet Houston, retaining the network’s existing, long-lasting cable agreements.
The Penguins’ majority owner Fenway Sports Group (FSG) could transfer the team’s local rights to its Boston-based NESN RSN, but the Jazz and Golden Knights would need to find new local broadcast homes. Women’s National Basketball Association (WNBA) franchises, US college teams, and high schools will also be affected by the shutdown.
SportsPro says…
While Diamond Sports Group’s (DSG) push for bankruptcy is widely viewed as an attempt to renegotiate local rights deals for lower fees or to include provisions for streaming, WBD is eyeing a complete break with an RSN market that is struggling to futureproof itself against digital consumption habits.
MLB has arguably been the greatest beneficiary from the RSN model, so it is no surprise that its teams have been the most concerned about the ongoing turmoil. However, closing WBD’s three RSNs during the middle of the baseball season would have been the worst possible outcome for both teams and fans.
Avoiding that particular scenario gives MLB time to flesh out a plan for local distribution that might need to scale to include teams caught up in the DSG situation. This could either be dedicated linear services or an MLB.TV capable of showing in-market matchups. The Astros effectively taking over an RSN could also be a potential option for some teams.
WBD is also keen to avoid any chaos given it needs to maintain good relations with the NBA, NHL, and MLB, given its national television deals with all three. A considered exit means a more amicable separation that won’t affect future dealings – especially with the NBA rights up for grabs in the near future.
