It was reported by Bloomberg Analysis last Thursday that Bally Sports, the brand that Sinclair Broadcasting’s subsidiary Diamond Sports Group uses to distribute regional sports networks around the country is filing for bankruptcy and will restructure. This should come as no shock to anyone who knows anything about electronic broadcasting because the business model of cable or streaming providers in 2023 is unsustainable.
When Bally’s/Sinclair took over Fox Sports regional networks, including Fox Sports North where fans of the Twins, Wild, and Timberwolves could find the games, they immediately got into a per subscriber rate war with many of their distributors. Wanting to jack up the rates for every provider’s subscriber rate, raising the monthly fee for every customer right out of the gate was maybe one of the strangest business moves I’ve ever seen in this business and made it predictable this outfit was going to fail. Bally’s counter to fighting with cable providers, YouTube TV, Hulu Plus and other outlets who dropped them by starting their own app for 20 bucks a month was a desperate move and laughable on its surface.
Here’s what Bally’s and other cable networks don’t understand:
1) Yes, people will pay for Netflix, Hulu, Amazon Prime, Paramount Plus, Disney Plus and other services to watch television shows and movies, but they don’t want to pay to watch an endless amount of commercials, which comes with sporting events.
2) When you fight over per subscriber fees with the provider, and they drop you, a) you don’t have as many viewers, b) your advertisers don’t reach as many viewers and c) the teams that you are covering become out of sight out of mind because they can’t see them flipping through the channels. Everybody loses.
Being in radio for almost thirty years I’ve heard our medium will be dead hundreds of times. They have been wrong about that since MTV debuted and played the song “Video Killed the Radio Star” and when Sirius/XM started. The reason radio survives is that we get our signal out anyway we can to reach as many people as we can for free. Whether it is a booming AM signal, a 100,000 watt FM signal, streaming on a computer or a phone, we want to reach as many listeners as possible. In turn we get advertisers to buy commercials because it brings people to their business or service. It’s not complicated. It’s a winning formula that has worked over a century.
Legendary NFL Commissioner Pete Rozell figured that out and took the local television rights away from teams, made a national television deal and made the league the most popular sport in the United States because it was easy to find the product at no cost to the fans. What we have now with networks and sometimes the leagues, including Major League Baseball, the NBA and NHL making deals that feature regional blackouts for both television and radio and more pay for view situations. It makes no sense that these sports networks, leagues and teams do as much work as they can to make it so hard for their fans to receive the product to follow their teams in broadcast media. If they don’t change that mindset they will keep failing both with their business plan and their fans who are getting more frustrated by the day.