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Broadcasting & Cable
Broadcasting & Cable
Daniel Frankel

Broadcasters Nexstar, Sinclair, Gray and Scripps in Talks With the NBA and NHL, Also Looking to Step in on Abandoned RSN Deals

Sergei Bobrovsky #72 of the Florida Panthers makes a save against Jack Eichel #9 of the Vegas Golden Knights during the third period at T-Mobile Arena on January 12, 2023

Broadcast station group operators Nexstar, Sinclair, Scripps and Gray have had recent talks with the NBA and NHL about taking over their local TV deals, according to numerous published reports citing direct company sources. 

This isn't a shocker. 

A report already emerged late last week that Disney/ESPN, Apple, Amazon and Google had inquired about possibly acquiring local TV contracts from National Basketball Association and National Hockey League teams.

And these local rights might very soon be available. 

Sinclair Broadcast Group's Bally Sports, the largest pro sports-focused regional sports network in America with 39 remaining Major League Baseball, NBA and NHL teams tied to it, is currently being whittled away in a Houston bankruptcy court. 

Over the spring and summer, the subsidiary that operates Bally, Diamond Sports Group, used the grace of Chapter 11 to simply walk away from two unprofitable MLB team deals it wasn't able to restructure to its liking. 

The NBA and NHL are getting ready to start their seasons in October, and league administrators seem to be weighing the same calculus MLB had do -- what do they do if Diamond demands renegotiated terms they can't accept?

Either these talks are real ... or lawyers for the NBA and NHL are leaking stuff to the press trying to message Diamond that they do in fact have local TV alternatives. 

Either way, the whole regional sports networks system looks far more fragile than it did even in March, when Diamond entered bankruptcy. At the time, it seemed debt would simply be exchanged for equity, a few teams would have to accept a bit less money ... and the RSN paradigm would play on. 

But now it feels like a whole new ballgame. 

For one, the NBA and NHL seem enthusiastic about exiting the pay TV ecosystem, which pays better base fees but greatly limits their reach and ability to engage fans.

With Warner Bros. Discovery looking to abandon its limited RSN operation, AT&T SportsNet, the NHL's defending Stanley Cup champion Vegas Golden Knights announced a new agreement with E.W. Scripps in early May that will see the team's games broadcast free and over the air on Nevada station KMCC next season. 

The Knights' SportsNet Now arrangement limited their TV exposure to only around 35% of viewers in their local market. Now, the pro hockey club can engage anyone with broadcast access through their pay TV provider or over-the-air antenna, selling advertising impressions based on each and every of them... and perhaps capitalizing on opportunities via ATSC 3.0, a technology Scripps has aggressively invested in. 

Even before the Knights announced their big retro move to broadcast, the NBA's Phoenix Suns and WNBA's Phoenix Mercury, both now owned by mortgage-lending mogul Mat Ishbia, announced plans to walk away from Bally Sports and enter a new deal with Gray Television to show games locally in Arizona, also on broadcast, while also creating a direct-to-consumer streaming option via Kiswe Mobile. 

Meanwhile, also cut loose as WBD abandoned the RSN business, another former SportsNet Rocky Mountain resident, the NBA's Utah Jazz, entered a hybrid broadcast/DTC deal with Sinclair

The NBA's Houston Rockets, which call SportsNet Southwest home for now, are undoubtedly looking for a new TV channel to live, as are other SportsNet denizens: MLB's Colorado Rockies, Pittsburgh Pirates and Houston Astros; and the NHL's Pittsburgh Penguins.

Meanwhile, with the MLB's Arizona Diamondbacks, Suns and Mercury all leaving Bally Sports Arizona at once, it seems likely that the channel's last remaining tenant, the Phoenix Coyotes, will probably be looking for a local TV solution, too. 

Of course, none of this is accounting for what Diamond might do in October when it comes time to pay the 11 other NHL teams under the Bally Sports umbrella ... or the 13 remaining NBA teams. 

It seems likely that at least some of those RSN deals are unprofitable and that Diamond will look to leverage Chapter 11 restructuring just as it did with the MLB earlier this summer. 

And it now seems likely the NBA and NHL will push back. 

All of this is occurring as Diamond faces multiple pay TV carriage negotiations, which are complicated processes in the best of times. 

DirecTV already told the court in Texas last week that the stability of any restructuring plan must be weighed against the fact that 47% Bally Sports TV households must be renewed in the fall, with a carriage deal also expiring with No. 1 operator Comcast.

Oh, and Diamond's deal with No. 2 operator Charter Communications expires in September. 

So here we are. 

Diamond spent the entire summer seemingly not establishing any kind of permanent truce with the MLB at all -- in fact, Commissioner Rob Manfred seems more determined than ever to move on without Bally Sports and Sinclair down the road. 

And now, it has months more of tedious negotiations. 

Pro tip: Convince your children to become bankruptcy lawyers. 

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