{"id":6217,"date":"2024-11-07T16:28:10","date_gmt":"2024-11-07T16:28:10","guid":{"rendered":"https:\/\/blogs.luc.edu\/compliance\/?p=6217"},"modified":"2024-11-07T16:36:53","modified_gmt":"2024-11-07T16:36:53","slug":"no-one-can-watch-the-chicago-bulls-and-other-reasons-why-the-mlb-nba-and-nhl-need-to-consider-nationalizing-their-media-rights","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=6217","title":{"rendered":"No One Can Watch the Chicago Bulls! And Other Reasons Why the MLB, NBA, and NHL Need to Consider Nationalizing Their Media Rights."},"content":{"rendered":"

Chris Wilford<\/em><\/p>\n

Associate Editor<\/em><\/p>\n

Loyola University Chicago School of Law, JD 2026<\/em><\/p>\n

Regional Sports Networks<\/a> (RSNs) are the TV channels that show a sports team\u2019s games in a local area. Due to a demand for sports by television viewers over the past few decades, RSNs created large revenues from local media rights deals (TV contracts) for professional sports leagues. This issue impacts several of the major professional leagues: the National Basketball Association (NBA), National Hockey League (NHL), and Major League Baseball (MLB). Currently, due to the trend of cord-cutting and a lack of regulation by the league offices, many fans are left without a viable way to watch their local teams, including much of the City of Chicago. <\/p>\n

Cord cutting is killing RSNs<\/strong><\/p>\n

RSNs make money<\/a> by the fees they collect from cable and streaming distributors (think DirecTV, Xfinity, or YouTube TV). In turn, the teams make money by getting RSNs to bid on their media rights. Cable distributors, who pay the RSNs a fee to air their channel, make money via customers who pay their cable and streaming bills. However, because many people are getting rid of cable and are watching sports on different platforms, or have stopped watching altogether, cable providers have begun dropping struggling RSNs<\/a> from their cable and streaming packages. Additionally, even when RSNs are not necessarily struggling, providers like Xfinity have decided cord-cutting has done enough<\/a> damage. This led to providers moving some RSNs to a higher fee tier which means a higher cost to the consumer and as a result lower viewership for RSNs.<\/p>\n

These economic conditions have put an RSN conglomerate, owned by Diamond Sports Group, into Chapter 11 bankruptcy. <\/a>Diamond Sports Group owns RSNs with the local media rights to 33 MLB, NHL, and NBA teams<\/a>. To put this number into perspective, 33 is just larger than the number of teams any individual major professional league has<\/a>. The MLB is especially at risk because 22 of the teams that Diamond Sports Group owns rights\u2019 to are baseball teams. This leaves a questionably operational bankrupt company with just over two-thirds of the MLB\u2019s exclusive local media deals.<\/p>\n

The movement to nationalize media rights<\/strong><\/p>\n

The NBA\u2019s commissioner had harsh remarks about RSNs, noting that 18 of them partnered with the league were in bankruptcy<\/a>. Because of this the league had to take \u201csignificantly smaller fees this year\u201d to deal with Diamond Sports Group<\/a> shortcomings. The NBA has slowly attempted to insulate itself from the unsteady future of RSNs with its new media deal<\/a>, which expanded the number of nationally broadcast games for each team from 12 to 15, cutting into \u201cthe product\u201d of games RSNs \u201csell\u201d.<\/p>\n

Additionally, the commissioner of the MLB made it clear the league is frustrated with the situation the league is in with Diamond Sports Group,<\/a> as well as RSNs as a whole<\/a>. There have been recent discussions to nationalize baseball\u2019s media rights,<\/a> however, there is no current action by the MLB to do such a restructuring to the league\u2019s media deals. Nationalizing media rights<\/a> means that a league centralized each team\u2019s media rights for contracts into one deal. These contracts are negotiated by league officials, rather than team owners, revenue sharing and implemented league-wide. Revenue sharing has always been the issue with nationalizing a media rights contract. Large market owners do not want to evenly share media revenues with small market owners. And the disparities are stark; in 2022 the New York Yankees took in $143 million in media rights fees whereas the Rockies received only $57 million<\/a>.<\/p>\n

What\u2019s going on in Chicago?<\/strong><\/p>\n

Fortunately, or unfortunately, Chicago is not a market that was partnered with Diamond Sports Group. Its situation, however, is why the leagues need to nationalize their media rights. In 2020<\/a>, the Cubs, under new ownership, decided to create a team-owned RSN, and 2024<\/a> marked the end of the contract with the rest of Chicago\u2019s non-football teams. The White Sox, Bulls, and Blackhawks decided to go with the distributor Standard Media who owns the now-named Chicago Sports Network.<\/a> As mentioned above, Xfinity increased the fee tier it puts RSNs in. Chicago\u2019s cable market is widely dominated by Xfinity and because Standard Media has no other channels on Xfinity\u2019s packages, it has little room to negotiate<\/a>. Currently, there is no deal between Xfinity and Standard Media<\/a>, yet the NHL season started October 4th<\/sup> and the NBA season started October 22nd<\/sup>. Most households in Chicagoland (home to flagship franchises for two of these leagues) cannot watch their teams and this situation will only slowly repeat itself. Chicago is a large, passionate sports market leaving cable and streaming less of a concern for dropped viewership, yet if a deal can\u2019t be reached in a market like Chicago, what will happen as providers begin to renegotiate with RSNs in smaller markets?<\/p>\n

Ditch the RSNs<\/strong><\/p>\n

The first step is to have leagues regulate team\u2019s RSN contracts. Only leagues offices, not individual owners, can ensure the RSNs are being correctly distributed to cable providers and streaming platforms at fair prices for fans. However, leagues need to finally give up on the RSN model and nationalize teams\u2019 local media rights deals. RSNs are limiting access to watching local teams live and creating costs that are only being passed onto fans. Although owners of larger market teams are resistant, national media deals are more beneficial to the health of the leagues, ensuring consistent distribution of the games on TV and steady revenue from their media rights. Further, shared media revenues bring more parity into leagues, assisting small market owners in competing with large market payroll sizes. Professional sports are constantly battling to keep viewership against each other and in the world of streaming against other types of content. Why make it harder to watch your own product when it\u2019s already so easy for a viewer to turn on something else?<\/p>\n","protected":false},"excerpt":{"rendered":"

Regional Sports Networks (RSNs) are the TV channels that show a sports team\u2019s games in a local area. Due to a demand for sports by television viewers over the past few decades, RSNs created large revenues from local media rights deals (TV contracts) for professional sports leagues. This issue impacts several of the major professional leagues: the National Basketball Association (NBA), National Hockey League (NHL), and Major League Baseball (MLB). Currently, due to the trend of cord-cutting and a lack of regulation by the league offices, many fans are left without a viable way to watch their local teams, including much of the City of Chicago.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,1],"tags":[1303,1690],"class_list":["post-6217","post","type-post","status-publish","format-standard","hentry","category-sports","category-uncategorized","tag-media","tag-regulation"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6217"}],"version-history":[{"count":1,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6217\/revisions"}],"predecessor-version":[{"id":6218,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/6217\/revisions\/6218"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}