By Phillip Swann
The TV Answer Man – @tvanswerman
TV Answer Man, there’s something I don’t understand. The Phoenix Suns and now the Utah Jazz are going to make their games free on local television. They used to sell the games on a Regional Sports Network. Won’t the teams lose money with the new TV deals? Why are they doing this? — Cleve, Tulsa, Oklahoma.
Cleve, the NBA’s Utah Jazz yesterday announced that it has signed a new TV deal that will make all non-nationally televised Jazz games available for free on a local Utah channel, KJZZ, channel 14, and a subscription-based streaming service.
The Jazz’ move to free over-the-air local television follows similar moves by the NBA’s Phoenix Suns and the NHL’s Vegas Golden Knights. (The Suns’ TV deal with local broadcaster Gray Television is being challenged in court by Diamond Sports, the owner of the Bally Sports regional sports networks.)
The three teams were previously carried by regional sports networks (RSNs) which paid millions of dollars for the rights. While all three teams express confidence that the local TV deals will generate as much or more revenue (advertising, etc.) as the RSN deals, many industry observers scoff at the notion.
“In terms of total media revenues….Not a chance!” says Bob Thompson, the retired president of Fox Sports Networks. “Jazz already controlled ad inventory and paid production costs. The current deal pays them another $22m in rights. Assume 72 local games. Jazz would have to sell another $300k per game in order to be whole. That is probably at least 10x what they do per game now.”
So why would the teams enter agreements that will provide less money?
Because they had little choice.
The Jazz previously had a TV deal with Warner Bros. Discovery (WBD), the owner of the three AT&T-named RSNs. But earlier this year, WBD notified the major professional sports leagues that it no longer wanted to broadcast their games, forcing the Jazz to find another TV partner. With the industry in peril, no other RSN company was likely to step up so the Jazz made the best of a bad situation by partnering with the local Utah station, which is owned by Sinclair Broadcasting. The team will now try to create a new economic model using free TV.
The Golden Knights, which were also on an AT&T RSN, were in the same position when it signed a new local TV deal with Scripps while the Suns went with local broadcaster Gray Television because its former RSN TV partner, Diamond Sports, has declared bankruptcy. (Diamond Sports has filed a lawsuit challenging the Suns-Gray deal.)
There’s little doubt that all three teams would prefer to continue taking the RSN fees, but they’re gone. And if RSNs drop more contracts, which is highly likely, the teams will have to accept that they make not make as much money as they used to.
Cleve, hope that helps. Happy viewing and stay safe!
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvanswerman.com Please include your first name and hometown in your message.
— Phillip Swann
@tvanswerman
