How Uncertainty of RSN Business Affects Trail Blazers, ROOT Sports
Warner Bros. Discovery, which owns a minority stake in ROOT Sports Northwest, plans to get out of the regional sports business in the coming weeks.
The business model of regional sports networks is in a state of flux currently, but as of now, the Trail Blazers are unaffected.
On Friday afternoon, the Sports Business Journal reported that Warner Bros. Discovery plans to get out of the RSN business entirely in the near future. Teams currently under contract with WBD-owned networks have until March 31 to reach deals to buy back their rights, before the networks file for Chapter 7 liquidation.
The Blazers are in the second season of a five-year deal they signed in 2021 with ROOT Sports Northwest to broadcast their games. Warner owns a 40 percent minority stake in the channel; the other 60 percent is owned by the Seattle Mariners. The NHL's Seattle Kraken also broadcast their games on the network.
On Friday evening, the team issued a statement about Warner Bros Discovery divesting itself from its RSN properties, saying their partnership with ROOT is not impacted.
The Blazers are in a unique position as one of only a small handful of teams that owns its own broadcast. Their on-air talent and broadcast production staff are employees of the Portland Trail Blazers, not of ROOT Sports or, before it, the team's previous broadcast partner, NBC Sports Northwest, as is usually the case in most markets. As such, if ROOT was to go under at some point in the future, the Blazers wouldn't have to deal with nearly as many hurdles to find a new distribution partner as they would if their broadcasts were also being produced by a channel that was being liquidated.
Since the deal kicked in in the fall of 2021, the Blazers' partnership with ROOT Sports has been unpopular with fans due to the channel's lack of availability on many common streaming platforms including YouTube TV and Hulu. Those deals are negotiated between the channel and those streaming providers, meaning the availability of the channel is entirely out of the Blazers' control.
As the business of sports broadcasting moves away from cable and towards streaming, that leaves the future of regional sports broadcasts up in the air.
"I do think the big streaming companies have a lot of interest in sports, and they've had it at the national level, whether it be Thursday Night Football, MLB, other things," Blazers president of business operations Dewayne Hankins said at his press conference in September during the Blazers' media day. "They haven't shown a ton of interest on the regional side in any way that is meaningful. I think for RSNs, it's a tough business model. During the pandemic, the amount of people that dropped their cable and never came back was quite a lot, and it's affected a lot of RSNs differently.
"I will say, with ROOT, we're excited. That station is owned primarily by the Mariners, and with us and the Kraken. And the Mariners are doing fine financially. You're not seeing that with some of these other RSNs."
Warner Bros. Discovery is not the only RSN operator whose future is currently in question. Sinclair-owned Diamond Sports Group, the parent company of the Bally Sports networks that broadcast games for 16 NBA teams, is expected to file for bankruptcy before the end of March.
At his annual All-Star Weekend press conference this past Saturday in Salt Lake City, NBA commissioner Adam Silver was asked about Diamond's financial troubles and what the league would do in the event they filed for bankruptcy. This was what he said:
"Short term, I’m not all that concerned. It largely affects the regular season for the NBA in terms of distributing, delivering those games directly to our consumers. And if they were to indeed, you know, file for bankruptcy, there won’t be that much of the regular season left. For that period of time, we will have in place arrangements, if necessary, to continue to distribute those games to fans. So I think that’s what’s most important.
"I would say long term I’m not that concerned because there are many other ways, platforms, including local over-the-air television, streaming services, other methods, to bring those games linear and digitally directly to fans.
"In the mid-term, it’s an issue we’re going to have to work through. It is our hope — we’ve been in extensive discussions with Diamond, the company you’re referring to, about a potential restructuring, and I’m fairly optimistic we’ll be able to work something out with them.
"As I said, if we can’t, we will make sure we have a system in place for delivering those games to fans"
At a press conference in Phoenix earlier this month, MLB commissioner Rob Manfred also indicated the league had a plan in place to take over those broadcasts should Diamond indeed go bankrupt.
Warner Bros. Discovery's intent to exit the RSN business comes as they continue to negotiate with the NBA on a new national broadcast rights deal set to kick in in 2025. WBD is the parent company of Turner Sports, which has broadcast NBA games on TNT since 1989 and operated NBA TV, the league's 24-hour cable network, since the channel's inception in 1999.
As one of the NBA's incumbent media-rights partners (along with Disney, which owns ESPN and ABC), Warner has an exclusive negotiation window with the league until April of 2024, at which time the bidding could expand to other partners.
In league circles, it is believed that NBC could make a run at getting back in business with the NBA, either to broadcast games on TV or to put them on their Peacock streaming service. At least one of the major streaming platforms, such as Apple or Amazon, is also expected to get in on the bidding. Amazon just wrapped its first season producing the NFL's Thursday Night Football package, and Apple recently took over exclusive broadcast rights for Major League Soccer and has a weekly national MLB broadcast.
At both the local and national levels, the NBA—and greater sports landscape—is in the midst of seismic changes in how games will be broadcast, and how those broadcasts will be delivered to fans.