The regional sports network (RSN) era is ending, and with it, a unique business model that once thrived. The FanDuel Sports Network's impending closure in 2026 marks the end of an era, leaving fans and sports enthusiasts wondering what the future holds. But how did these networks fail, and what will the new streaming RSNs look like? Let's explore the rise and fall of RSNs and the potential future of sports broadcasting.
The Golden Age of RSNs
In the 2010s, RSNs were a rare and lucrative business model. They provided a win-win situation for sports teams, fans, and the networks themselves. For fans, RSNs were incredibly accessible; with cable TV, almost everyone had access to these networks, often included in basic or near-basic packages. These networks were a goldmine, generating substantial revenue. In 2010, the average RSN raked in $137.8 million in revenue, according to SNL Kagan. The key to their success lay in the economics of cable TV. Cable channels charge per customer, and higher-demand channels like RSNs can charge more. This model was sustainable as people were less likely to switch providers if a high-demand channel was lost.
The Cable TV Economics
The economics of cable TV played a crucial role in the RSN's success. Cable companies agreed to pay for RSNs to keep them on their systems. In 2012, CNN cost $0.50 per customer, while an RSN cost a staggering $2.50 per customer. This significant difference in pricing meant that RSNs were a substantial revenue stream for cable companies. The teams' presence on these networks was vital, as without them, the RSNs were worthless. This led to lucrative deals for teams, like the Los Angeles Dodgers' $8.35 billion, 25-year contract with Time Warner Cable in 2013, which was more than Turner Sports paid for NHL national rights in 2021.
The Decline of RSNs
However, the RSN's glory days were short-lived. As people cut the cord, the economics shifted. With fewer customers, cable companies found it financially impractical to pay the high fees RSNs demanded. This led to the exclusion of RSNs from streaming services like YouTube TV, Sling, and Hulu. The situation is exacerbated by the fact that non-sports fans have cut the cord at a higher rate than sports enthusiasts, impacting the revenue stream for RSNs.
The Streaming RSN Revolution
The future of sports broadcasting is in streaming RSNs. Major League Soccer (MLS) has already ditched local broadcasts for a new streaming service with Apple TV, but the economics haven't been favorable. This year, the MLS-specific service was discontinued, and all games will air through Apple TV+, which also carries Formula 1 and MLB's Friday Night Baseball. Several NHL and NBA teams have moved their games to over-the-air networks, offering fans an affordable option with a $25 antenna. However, this approach varies in different markets, making it challenging to access games in some areas.
The Uncertain Future
The NBA and MLB are exploring the idea of launching their streaming RSNs, selling local teams' TV rights to streamers like Prime Video or ESPN Unlimited. This model could eliminate blackouts, but the details are still unclear. The success of this venture depends on the leagues' ability to negotiate lucrative deals, as standalone streaming RSNs may not be as profitable. The key question remains: how will games be distributed to local television?
Resilience in Some Markets
Interestingly, RSNs are still thriving in certain markets. Teams in big markets have not abandoned RSNs, and cable can still be a profitable venture. The Los Angeles Angels and Atlanta Braves are considering creating new RSNs after ending their agreements with FanDuel. The economics of these deals vary widely, depending on market size and sport.
The Bottom Line
While RSNs are dying, the future of sports broadcasting is evolving. Teams and leagues are adapting, but the primary concern is the financial aspect. As Adam Silver and Rob Manfred emphasize the ease of watching games, it's essential to recognize that MLB and the NBA are businesses. For fans, a streaming RSN with games available over the air or on basic cable seems ideal, but the leagues' primary focus is on profitability. Ultimately, money drives the industry, and the future of sports broadcasting will be shaped by the balance between accessibility and revenue.
