Days after Matt Ishbia reached a deal to buy majority stakes in the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury in December, he met with top executives to learn more about the teams’ business operations, including how local fans How could you see? Sports on TV.
Executives detailed three possibilities moving forward, including remaining with Diamond Sports Group, which owns the regional sports network, which has had the rights to show the teams’ games for more than a decade . Diamond Sports was $8 billion in debt – it would file for bankruptcy protection in March – but it still wrote huge checks worth millions of dollars a year.
However, Mr. Ishbia turned to the riskiest of the three options: abandoning the regional sports network model that most teams had followed for decades and showing Suns and Mercury games for free on over-the-air channels. To return to. This may cost teams money in the short term, but the bet was that it would help them reach more fans, including those who had given up their cable subscriptions or, like many younger fans, who had Never was.
“What was interesting was that a lot of people were contacting me on social media about how they couldn’t watch Suns games,” Mr. Ishbia said in an interview. He added, “This is their team. This is not Matt’s team. Not being able to watch your game was not an option we were interested in.”
In April, the organization announced that it would Skip Diamond Sports and broadcast all Suns and Mercury games on over-the-air channels with the company Gray Television. He sent thousands of free antennas to fans who needed them. They also created a streaming option with Kiswe Company.
Mr. Ishbia’s decision sent shockwaves through the sports media world – clubs, leagues, networks, cable and satellite providers – that are trying to understand a decade-long shift in the way fans watch their home teams. People who are used to finding games on one channel are having to find them elsewhere as networks and leagues are shuffling their distribution deals in response to the increase in cord cutting and the boom in streaming. Some clubs may face shortages as they search for ways to replace revenue lost by the end of local media deals, potentially hindering their ability to bid for top players.
Expect more teams to make changes to their local media deals in the coming months as their contracts expire. Those who choose to show more of their games on free television are returning to a world that the NFL, which shows more than 90 percent of its games on over-the-air channels, never left.
“It’s back to the future,” said Michael Nathanson, media analyst at MoffettNathanson. “As more people are losing touch, these teams are losing the ability to reach their fans. “So why not broadcast it for free and also create a streaming product that is more accessible to younger fans.”
The Phoenix-area franchise is part of a growing wave of teams doing the same. Like the Diamondbacks, the San Diego Padres ended their agreement with Diamond Sports, the largest regional sports network provider. Major League Baseball used its broadcast and streaming capabilities to keep teams on the air and guaranteed they would get 80 percent of the revenue they received in their Diamond Sports deals.
Diamond Sports, a must have Earn at least $400 million in annual debt payments, is in talks with its creditors, some of whom want to reshape the company’s business while others want to buy it out. Diamond Sports is also in talks with the NBA and other leagues about reducing its rights fees.
A company spokesperson declined to comment on negotiations with creditors and the leagues.
Last year, Monumental Sports Network, which is owned by Ted Leonsis, owner of the Washington Wizards (NBA), Capitals (NHL) and Mystics (WNBA). purchased NBC Sports Washington And unveiled a new streaming service. Vegas Golden Knights of the NHL said in may that they planned to move to a free over-the-air channel. The NBA’s Utah Jazz and Los Angeles Clippers are selling their games and programming directly to viewers with streaming packages, with the Jazz also broadcasting their games on a free channel.
The Jazz are “probably the biggest real media company in the state,” team owner Ryan Smith said in an interview this year. “If you really think about the NBA, we’re no different than a media or technology company.”
Mr Smith said he expected most teams to completely take over their broadcasting within three years.
Major League Baseball and the NBA have been preparing for this possibility for years. Commissioner Rob Manfred said when Diamond’s parent company Sinclair purchased the regional sports network from Fox Sports in 2019, MLB made the bid because it wanted to control as much of its content as possible.
“This was a result of our belief that media is going to change dramatically,” he said, noting that 11 major league teams still have contracts with Diamond Sports.
Local media deals have traditionally been controlled by the clubs, but in January MLB hired executives from regional sports networks to develop contingency plans, such as taking back the rights to Padres and Diamondbacks games and selling them to MLB.TV. Show on the subscription service of CBS, as well as a range of cable and satellite companies. The same announcers were involved in the broadcast.
Jason and Wendy Dow, who live in Queen Creek, south of Phoenix, canceled their cable package with Cox this summer to save money and signed up for YouTube TV. He now watches the Diamondbacks using the MLB app, which he says has better streaming functions.
“I was a little nervous at first, but it got better in the end,” Jason Dow said at a recent Diamondbacks home game. “On the old feed, you basically saw the game without a lot of extras.”
The NBA began preparing for the changes in 2018, creating a “next generation” service that includes a streaming service and production and distribution support that teams can use to stream broadcasts. So far, the Clippers, Jazz and Suns are using it.
Diamond’s bankruptcy does not affect every team. Franchises such as the New York Knicks, Denver Nuggets and Wizards in the NBA and the New York Yankees and Boston Red Sox in baseball own their own networks. Other teams are tied into long-term deals, such as the Los Angeles Dodgers, who signed a 25-year, $8.35 billion deal with Time Warner Cable in 2013 and have partial ownership of their regional sports networks.
While the deals bring increased scrutiny, some teams are facing declining viewership due to cord cutting. For others like the Nuggets and Dodgers, disputes with carriers like DirecTV and Comcast meant that their games were not available to most people in their markets for part of their contracts.
The Suns first presented games on cable television in 1981 and began broadcasting games in 2003 on Fox Sports, which later became Bailey Sports.
“At the time it seemed pretty good, pretty solid,” said Jerry Colangelo, who was with the Suns as an executive and then owner from 1968 to 2004. “And they’ve had some strong years of growth, certainly.”
Rather than outsourcing production and advertising sales to the networks, Suns produced its own content “to control our own destiny,” Mr. Colangelo said.
The Suns continued to produce their own games and sell their own advertising after Mr. Colangelo sold the team. This gave him and Mercury an edge when Mr. Ishbia decided to change course. They will have to make up those resources if most other teams lose ties to regional sports networks.
Initial results have been positive. Josh Bartelstein, chief executive of the Suns and the Mercury, said viewership for Mercury games increased 418 percent last season.
Mr. Ishbia said it was his goal to attract fans to Sun and Mercury. He has made big (and expensive) moves since purchasing the team, trading for highly paid stars Kevin Durant and Bradley Beal, and investing $100 million in a new practice facility for the Mercury and a new headquarters for both teams. Have invested more than.
“My focus is not on money,” Mr. Ishbia said. “We are focused on success. We’re focused on the fan experience. And money always follows those things.
He added: “I think other teams will follow whether they have to or want to. I think this is the future.”