The local rights to air NBA, NHL, and MLB games are causing tensions among broadcast station owners and pay-TV providers. Regional sports networks have traditionally held these rights but are now facing uncertainty due to the decline of cable TV subscriptions. Broadcast station owners such as E.W. Scripps Co., Gray Television, Nexstar Media Group, and Sinclair are in discussions with leagues and teams to carry games on free over-the-air channels. This potential shift to a model centered around broadcast stations and direct-to-consumer streaming could disrupt the current business model and give broadcast station owners more leverage in negotiations with pay-TV providers.
The discussions have gained momentum following Diamond Sports Group’s bankruptcy filing, which has put some teams’ rights on the table. Broadcasters see carrying local NBA, NHL, and MLB games as an opportunity to negotiate higher fees from pay-TV operators. By obtaining sports rights in multiple markets, companies like Gray and Nexstar can use these rights as leverage to increase fees for all their stations. Distributors are concerned about more games moving to local broadcast stations, which are free for viewers with an antenna, as this could expedite cord-cutting.
Pay-TV providers are exploring alternatives to keep local games in the bundle, such as introducing cheaper TV bundles without regional sports networks. While discussions have primarily focused on the NBA and NHL, MLB teams are also at risk. DirecTV executives are expected to meet with NBA and NHL leaders in the coming weeks to discuss local games. Regional sports networks are facing pressure due to cord-cutting and increasing debt, leading to bankruptcy filings. These networks are adapting by offering direct-to-consumer streaming options.
Some broadcast station owners have already secured deals to air local NBA, NHL, and MLB games. Broadcast stations owned by Gray, Sinclair, Nexstar, and Scripps will carry games for the Phoenix Suns, Utah Jazz, Los Angeles Clippers, and Las Vegas Golden Knights, respectively. These deals increase the reach of teams and provide new revenue opportunities through advertising. However, replicating the lucrative fees from regional sports networks may be challenging.
A challenge for airing local MLB games is the large territories covered by teams, which may require multiple broadcast stations. Nonetheless, broadcast station owners have shown interest in acquiring rights to air local MLB games. The future of local sports broadcasting remains uncertain as the industry navigates the changing landscape of media consumption.