Collapse of Regional Sports Networks (Diamond Sports Group files bankruptcy, Warner-Discovery looking to leave business, Xfinity drops Bally)

rsteen

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Oct 1, 2022
393
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This is going to be a rough road for survival of many teams. While the league will survive it is going to change . There are going to be a number of teams fold over the next 10 years. The teams are now overvalued .
So im thinking (hoping) this is a good thing and hopefully blackouts will also be a thing of the past.

The range of optimism and pessimism here is fascinating.
 
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Night Shift

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Nov 3, 2014
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The range of optimism and pessimism here is fascinating.

Coming from the Optimistic guy, :laugh:I would like to see teams fold. I felt 32 teams is wayyy to many for our league.

I understand Betman wants to grow the game but adding teams to be like the NFL wasn't the answer.
 

IU Hawks fan

They call me IU
Dec 30, 2008
28,860
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NW Burbs
Teams won't fold but there's going to need to be a reset.

Regional rights likely need to die in favor of blackout-free national DTC packages. Teams & players will make less, but is that really a bad thing? For long they've been supplemented by non-fans, it's time for the market to correct itself and let the fans who want it pay for it.
 
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rsteen

Registered User
Oct 1, 2022
393
283
Coming from the Optimistic guy, :laugh:I would like to see teams fold. I felt 32 teams is wayyy to many for our league.

I understand Betman wants to grow the game but adding teams to be like the NFL wasn't the answer.
Oh, we're all just pessimistic then. The main really pointless team now is Arizona. It would be a shame to see teams like Dallas or Carolina fold now that they're successful.
 

Byrddog

Lifer
Nov 23, 2007
7,534
845
Well. The teams wouldn't have to buy the rights to their own content. That is why RSNs are failing. The rights deals in the hundreds of millions of dollars aren't sustainable.
Correct me if I am wrong but the rights have been bought in order for the broadcasters to have sole right to that team to broadcast that teams games. And what you say is true the teams could buy back those rights. The issue still remains the monies paid by Bally for instance has been cooked into the P/L of the league and each team. Loss of that revenue impacts the financial stability of the league and the team resulting is less operations money and will impact how much teams can spend on salaries. It would impact the CAP in a negative way. Even if the Cap was to be frozen teams would have to impose spending limits individually in order to remain solvent.

Now many are going to say but the individual teams owning there rights would profit from controlling the advertising. Like I said before if these broadcasting networks are unable to sell enough advertising to remain profitable how can one expect 31 teams to buy back the rights spin up a broadcasting ability and be able to not just gush losses in the environment right now. There are just not enough fans that are going to pay for programming in each market. Even in huge markets like New York the fans are broken up into Rangers, Islanders Buffalo and even New Jersey fans making the fan pie sections smaller. Now could an agreement be made where the league owns the broadcasting rights and provides a product like Center Ice used to be? Yeah I guess that could happen but the problem would sill remain equipment personnel and even satellite costs would be prohibitive. The satellite cost alone would be astronomical. Then there is the fact that across the league there are 9 to 14 teams that show a profit for any given year, Forbes reports these numbers yearly. There is just no way to expect the teams and the league could produce the income to cover broadcasting but imagine if they could produce the same amount that broadcasting has paid the league in the past. I for one do not believe that the league could manage that money to a break even much less profit. How often have the bean counters I. The league been right since inception of the cap? Like this year in Oct They ran Bettman out to announce that the cap would increase 4 mil now what ten days or so ago he has to drop that number to 1 million if the last part of the season can finish well. Then the TV issues with Bally come to light which snowballs to all the TV revenue streams, the result is uncertainty. Personally if the chapter 11 comes out at 50% reduction there is going to be a cap reduction.. How much is big speculation I read one article that indicated best case a 1 mil reduction and worst case 11 mil reduction. Ones a really bad number the other a crippling number, like most things the final result will probably be in the middle. Some think this would just be for a year I just do not see it the impact is going to be at least 5 years before there will be any confidence stabilization has happened. Hopefully there is some moving parts we do not see that will for a better word save the league. Cost control must be established in every organization and spending like a drunken sailor is over. If not in the end the NHL could revert to a 12 team league.
 

Golden_Jet

Registered User
Sep 21, 2005
26,113
13,503
Cable and dish are becoming a thing of the past with their unaffordable prices (especially for sports) on top of internet. Thats why streaming has been the future.

I have to think literally no one but sports fans have cable or a dish anymore. Even as the years have gone by since streaming came out, sports fans are getting smarter and cutting the cord to save a $.

So im thinking (hoping) this is a good thing and hopefully blackouts will also be a thing of the past.
Good thing if you like less revenue, and flat or shrinking cap.
Maybe ticket prices would fall, hey there is a positive.
 

rsteen

Registered User
Oct 1, 2022
393
283
. The league been right since inception of the cap? Like this year in Oct They ran Bettman out to announce that the cap would increase 4 mil now what ten days or so ago he has to drop that number to 1 million if the last part of the season can finish well.
You've got it backwards, 1M is if they don't pay off the escrow debt, 4M is if revenues finish the season well and they do. It's down to the tens of millions by now.
Cost control must be established in every organization and spending like a drunken sailor is over. If not in the end the NHL could revert to a 12 team league.
They already have cost control. It's the salary cap.
 
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Byrddog

Lifer
Nov 23, 2007
7,534
845
Coming from the Optimistic guy, :laugh:I would like to see teams fold. I felt 32 teams is wayyy to many for our league.

I understand Betman wants to grow the game but adding teams to be like the NFL wasn't the answer.
We can agree on that the league has too many teams and the impact on quality of players show.

I would really like to be optimistic but I have watched the financials for the league for years and less than half the teams showing a profit over the last 10 years is a red signal. The inability of GM’s to control salary cost has put the league in a crappy spot having spent to the top of cap now facing reduction in cap. The league has done a poor job of budgeting and long term forecasting. Since the cap was initiated they have failed most years even predicting and setting the cap. When the lockout was settled imposing the CAP the league projected the cap would be 121 mil in 2020. Today the cap sits over 30% lower than predicted. The franchise fees paid by Vegas and Seattle has saved the cap from being reduced in the past few years if not for the pandemic the cap would have creased more just due to those fees. With attendance and viewership reducing over the last few years it points to the health of the league. With everyone at home for basically two years why did TV ratings not improve drastically? Why is Netflix facing bankruptcy too? Something has happened in the fight for the entertainment dollar.
 
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Masked

(Super/star)
Apr 16, 2017
6,835
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They got the donuts? Excellent....
Teams won't fold but there's going to need to be a reset.

Regional rights likely need to die in favor of blackout-free national DTC packages. Teams & players will make less, but is that really a bad thing? For long they've been supplemented by non-fans, it's time for the market to correct itself and let the fans who want it pay for it.

The only reset will be who is going to have the rights to regional games and what method they use to get the games into fans' homes. Regional rights are not going away. Franchises have been valued and purchased on the basis of having those rights.


I have to think literally no one but sports fans have cable or a dish anymore. Even as the years have gone by since streaming came out, sports fans are getting smarter and cutting the cord to save a $.

You're leaving out the older generation who are not internet savvy enough to stream tv and those who live in areas that don't get high speed internet.

Assen na yo!
 

Byrddog

Lifer
Nov 23, 2007
7,534
845
You've got it backwards, 1M is if they don't pay off the escrow debt, 4M is if revenues finish the season well and they do. It's down to the tens of millions by now.

They already have cost control. It's the salary cap.
Cost control is a joke look at the teams that are at the upper limit that are not going to make they post season. Then look at teams like Arizona adding dead cap to remain at the floor. Cap is a great thing for sports it prevents teams from doing What Detroit did for years successfully and winning cups then you had teams like Toronto and Edmonton spending like crazy with limited success I mean if the Oilers had not had Gretzky they would not have had those cups. Toronto last won a cup in 67 but from then to 2003 there spending was twice what some teams were spending. The same thing happened in MLB before a cap was put in. Even the NFL had the Cowboys spending for championships and since then how many have they won?
The cap purpose per Bettman at the time was to level the talent out giving even small market teams a chance to win a cup that has happened for the most part. It has not prevented GM’s to give out bloated long term contracts limiting teams and causing them to dive for loopholes in the contract. Like LTIR very few players play past age 34 yet contracts are inked well past that Weber , Pronger and a few others caused the league to change the CBA to stop that but still permits 8 year contracts to be signed where a 28 year old can lock up term to age 36. This has created another issue for the league like Louongo who wanted traded but could not. The league put in the buyout clauses but cases like Lou’s made it too expensive , then on a few occasions the league allowed up to three special buyouts. Then there is now situations like Kucherov who could have came back at least a month before the playoffs. And yes I’m a lightning fan and Kuch my favorite player but this situation is not good for the league. It is legal under the CBA for sure but it is a CB loophole that is now used more often by other teams as well. Using ltir to manipulate the cap is another legal but sleezy move.

This is in no way cost control, nor can it be a way to operate .
 

LadyStanley

Registered User
Sep 22, 2004
110,841
23,231
Sin City

Yahoo Sports take

An SBJ story earlier in the week said that “many” teams with regional sports network distribution deals “have been told to expect their local media rights fees to be cut by as much as 70% over the next several years” as the local TV landscape changes. Regional Sports Networks were once the pillar of cable television. But with more and more consumers switching to streaming-based entertainment options and the dwindling distribution of those networks, the channels are far less profitable than they were.

70% is a big cut
 
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Golden_Jet

Registered User
Sep 21, 2005
26,113
13,503
We can agree on that the league has too many teams and the impact on quality of players show.

I would really like to be optimistic but I have watched the financials for the league for years and less than half the teams showing a profit over the last 10 years is a red signal. The inability of GM’s to control salary cost has put the league in a crappy spot having spent to the top of cap now facing reduction in cap. The league has done a poor job of budgeting and long term forecasting. Since the cap was initiated they have failed most years even predicting and setting the cap. When the lockout was settled imposing the CAP the league projected the cap would be 121 mil in 2020. Today the cap sits over 30% lower than predicted. The franchise fees paid by Vegas and Seattle has saved the cap from being reduced in the past few years if not for the pandemic the cap would have creased more just due to those fees. With attendance and viewership reducing over the last few years it points to the health of the league. With everyone at home for basically two years why did TV ratings not improve drastically? Why is Netflix facing bankruptcy too? Something has happened in the fight for the entertainment dollar.
One problem was the 5% cap inflator the PA kept using. Artificially raising the cap.

Franchise fees paid by Vegas and Seattle have zero impact on the cap, since they are not part of HRR.

If you’ve been watching financials for 10 years. thought you would have known about the franchise fees.
 
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Seedtype

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Aug 16, 2009
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I know Blue Jackets occasionally just stream the arena feed on their site during the pre-season, usually paired with the radio stream(unless it doesn't work). Very primitive really, but it is free.

I'm curious if some teams without RSNs suddenly will go that route for a bit... better than nothing right?
 
Dec 15, 2002
29,289
8,728
Cost control is a joke look at the teams that are at the upper limit that are not going to make they post season. Then look at teams like Arizona adding dead cap to remain at the floor. Cap is a great thing for sports it prevents teams from doing What Detroit did for years successfully and winning cups then you had teams like Toronto and Edmonton spending like crazy with limited success I mean if the Oilers had not had Gretzky they would not have had those cups. Toronto last won a cup in 67 but from then to 2003 there spending was twice what some teams were spending. The same thing happened in MLB before a cap was put in. Even the NFL had the Cowboys spending for championships and since then how many have they won?
The cap purpose per Bettman at the time was to level the talent out giving even small market teams a chance to win a cup that has happened for the most part. It has not prevented GM’s to give out bloated long term contracts limiting teams and causing them to dive for loopholes in the contract. Like LTIR very few players play past age 34 yet contracts are inked well past that Weber , Pronger and a few others caused the league to change the CBA to stop that but still permits 8 year contracts to be signed where a 28 year old can lock up term to age 36. This has created another issue for the league like Louongo who wanted traded but could not. The league put in the buyout clauses but cases like Lou’s made it too expensive , then on a few occasions the league allowed up to three special buyouts. Then there is now situations like Kucherov who could have came back at least a month before the playoffs. And yes I’m a lightning fan and Kuch my favorite player but this situation is not good for the league. It is legal under the CBA for sure but it is a CB loophole that is now used more often by other teams as well. Using ltir to manipulate the cap is another legal but sleezy move.

This is in no way cost control, nor can it be a way to operate .
Maybe there's a way to restructure the calculation of the cap to provide relief to low-revenue teams, while coming up with a way to pool revenues to help provide support for those teams so that ...

... ah, that's way too easy. Better to create a lag calculation for the cap and ignore that teams are by and large going to spend to the cap anyway. Maybe even bring back the cap capture recapture penalty charge under bizarre, contrived scenarios for shits and giggles.
 

rojac

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Apr 5, 2007
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Still researching, but my immediate impression from the Disney/ATT notice is not for the teams to buy back rights. Looks more like Disney asking the teams to agree to terminate the contracts peacefully and not sue Disney/ATT over the contract termination.
That's Discovery not Disney. Disney is not in the RSN business.
 

jkrdevil

UnRegistered User
Apr 24, 2006
43,203
13,333
Miami
Running a TV network with just the Rangers would be a bad financial decision.
Not enough programming.
Especially as they run two networks.

I think the Devils contract runs up in a year or two. When they renewed in 2004/05, they were able to use YES and the Mets starting SNY at the time as leverage. Unlike most markets there are alternatives in NY.
 
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eddygee

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Mar 12, 2018
904
421

Yahoo Sports take



70% is a big cut
No really I was thinking maybe see it halved like 50% cut. This is worrisome we went from most of the teams being affected won't really be impacted to the well the underperformed RSNs will be axed but things will continue on for the others to the league's have been told to expect possibly 70% cuts.

Thus feels the beginning of a stock market crash that triggers a recession. It's probably healthy to go through to reset the market to get it healthy but sh!t$ not gonna be pretty. Behind the scenes Bettman and crew likely have been informed in that emergency people of the long-term prospects. There's alot of brave facing going on.

Prepare for a flat cap with likely reductions. Thank God for the ESPN/Turner deals. We would've been screwed 10 ways to Sunday just off the old NBC deal. The extra $325m yr from ESPN/Turner will help soften the blow. But after this RSN restructure/collapse we'll be effectively back to square on before NHL got these new National TV money. We have to hope we can keep things afloat North of the border and there isn't a rights reduction in Canada in a few yrs.
 
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Masked

(Super/star)
Apr 16, 2017
6,835
5,095
They got the donuts? Excellent....
Cost control is a joke look at the teams that are at the upper limit that are not going to make they post season. Then look at teams like Arizona adding dead cap to remain at the floor. Cap is a great thing for sports it prevents teams from doing What Detroit did for years successfully and winning cups then you had teams like Toronto and Edmonton spending like crazy with limited success I mean if the Oilers had not had Gretzky they would not have had those cups. Toronto last won a cup in 67 but from then to 2003 there spending was twice what some teams were spending. The same thing happened in MLB before a cap was put in. Even the NFL had the Cowboys spending for championships and since then how many have they won?
The cap purpose per Bettman at the time was to level the talent out giving even small market teams a chance to win a cup that has happened for the most part. It has not prevented GM’s to give out bloated long term contracts limiting teams and causing them to dive for loopholes in the contract. Like LTIR very few players play past age 34 yet contracts are inked well past that Weber , Pronger and a few others caused the league to change the CBA to stop that but still permits 8 year contracts to be signed where a 28 year old can lock up term to age 36. This has created another issue for the league like Louongo who wanted traded but could not. The league put in the buyout clauses but cases like Lou’s made it too expensive , then on a few occasions the league allowed up to three special buyouts. Then there is now situations like Kucherov who could have came back at least a month before the playoffs. And yes I’m a lightning fan and Kuch my favorite player but this situation is not good for the league. It is legal under the CBA for sure but it is a CB loophole that is now used more often by other teams as well. Using ltir to manipulate the cap is another legal but sleezy move.

This is in no way cost control, nor can it be a way to operate .

What's coherent from that is a bunch of nonsense.

Cost control has worked as expected. And once they were able to determine that player salaries were tied to revenues, the owners can continue to reduce the percentage paid out in each CBA negotiation.

The purpose of the cap was not to give small market teams a chance. That's just so ridiculously silly to believe. First of all, small market teams had a chance in the pre-Cap era since the age of UFA was so high that teams controlled the prime years of players they drafted. Teams in Detroit, Denver and New Jersey dominated the league in the years leading up to 2004. None of those could be considered big market teams.

The cap (and related lower age of UFA) was designed to control costs, which it has surely done since top player salaries are only now exceeding the pre-2004 levels, and to help direct the very best players to the biggest markets like we see in the NBA. An Atlanta Thrashers executive, I believe it was Stan Kasten, stated as much. The movement of stars like Crosby and McDavid has sort of failed because hockey players are rather conservative with their contracts and would rather commit to long term deals as soon as possible instead of positioning themselves to move to the big markets.

The ten biggest US markets are NY, LA, Chicago, Philly, Dallas, Bay Area, Atlanta, Houston, DC and Boston. In the 17 Cup winners since the cap was implemented there's been a Cup winner from the biggest team in those markets 7 times. The 17 Cup winners prior to the cap had the biggest team from those markets win twice.

Assen na yo!
 

IU Hawks fan

They call me IU
Dec 30, 2008
28,860
3,150
NW Burbs
Nobody cares about the owners, but the prospect of more years of flat cap is depressing.
The cap is tied to revenue, and if revenue tanks it's fake anyway. Might be better off negotiating a rollback since the players will be paying a large chunk back anyway.
 

rsteen

Registered User
Oct 1, 2022
393
283
The cap is tied to revenue, and if revenue tanks it's fake anyway. Might be better off negotiating a rollback since the players will be paying a large chunk back anyway.
Yeah, I know. However, they didn't cut the players' salaries in half when revenue ~halved during the pandemic. Since the Bally bankruptcy and general RSN devaluing is looking to be a more slow-motion disaster, it wouldn't surprise me if they attempt to struggle on with a stagnant cap rather than start negotiations for a rollback.

The cap on escrow over the next few years might mean that's not possible though.
 

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