The U.S. Regional Sports Network (RSN) industry has faced challenges in recent years from macro shifts in video consumption, the rising cost of media rights and the emergence of streaming. The downturn of the traditional linear TV business amid the rise of streaming alternatives and the ever-increasing sports rights fees demanded by various sports leagues left many RSNs with a broken pay-TV business model that several network owners are now trying to fix. Sinclair Inc., the largest player in the space, implemented major changes to its organizational structure designed to adapt to the increasingly difficult pay-TV landscape.

Sinclair bought its RSNs from The Walt Disney Company back in 2019, providing it with exclusive local sports programming rights to the games of more than 40 major league baseball, basketball and hockey teams. Sinclair formed an indirect, wholly owned subsidiary, Diamond Sports Group LLC, for its then-newly acquired local sports segment. A little over 2.5 years after closing the acquisition, Sinclair had already started to divest itself from its local sports programming business, as cash flows started to fall short of expectations.

The media company had a transaction with the Diamond Sports Group on March 1, 2022, making Diamond Sports an unconsolidated subsidiary of Sinclair, as the latter lost voting control of the subsidiary it formed years ago. However, Diamond Sports did not perform any better as an unconsolidated subsidiary. With cash flows down to only half of 2022 projections, Diamond Sports decided to file for Chapter 11 bankruptcy protection in March 2023 to swap $8 billion of its debt to equity for most creditors.

Since then, Bally Sports has been involved in a series of legal disputes with MLB and NBA franchises due to delinquent sports rights payments and sports rights deal disagreements. This has led to some teams fleeing the RSNs for local broadcast stations and direct-to-consumer streaming services.

The significant shifts in the economics of sports media, as streaming takes center stage and traditional models evolve, have reshaped the landscape of live sports entertainment.

Pain Points

In response to Diamond Sports' bankruptcy, members of the strategy team at this mid-market major league baseball team, along with colleagues in marketing and branding, sought to evaluate the overall distribution strategy. They wanted to assess the characteristics of their addressable market to examine the size, segments and demographics of their audience to understand the pay-TV and broadband landscape in their local market and beyond.

The team also wanted to assess the RSN's cash flow models, sports direct-to-consumer offerings available in the U.S. market and consumer insights on fan behavior. This comprehensive analysis could provide a holistic view of the landscape and inform the company's decision-making process.

The team needed a reliable source of information to understand the dynamics that are the building blocks of its distribution strategy, including insights on.

• Pay-TV and broadband operator data with subscriber estimates at the Zip, county and designated market area (DMA) level.
• RSNs to better understand cash flow models, media rights and overall TV network economics.
• Sports customer data points to gain insights on consumer preferences and digital consumption behavior.
• Streaming subscriber data, partnerships and marketing propositions to understand streaming strategies.
• Broadcast TV stations to evaluate potential broadcasting partners to ensure wide audience reach and viewership.

Without a comprehensive understanding of market dynamics, the company would be unable to make informed, data-driven decisions about their distribution strategy.

The Solution

S&P Global Market Intelligence ("Market Intelligence") understands the dynamic challenges and opportunities shaping the sports media industry. A comprehensive suite of solutions empowers stakeholders to effectively navigate these changes and seize new opportunities for growth and innovation. Specialists at Market Intelligence met with the strategy team and described a number of solutions, including:

	Pay-TV and Broadband Operator Data	The proprietary MediaCensus Broadband and Video subscriber dataset provides a comprehensive understanding of demographic trends and patterns. MediaCensus data is accessible across multiple geographic levels, including Zip code, County and DMA, encompassing 41,000 geographies, 1,200 operators and 180+ demographic metrics.[1]
	Regional Sports Network Data	600 TV Network P&L models include RSNs, and a Global Sports Rights database reveals historical deal values. The Kagan Annual Sports Report takes a deep dive into the reach, revenue, and expenses of U.S. regional sports networks and sports-rights-holding broadcasters, cable networks and streamers.
	Sports Customer Survey Data	Consumer/demographic profiles provide insights for apps produced by major sports leagues. 8,000+ sports survey data points cover consumer frequency, service, device and league sentiment responses, providing a better understanding of consumer preferences and digital consumption behavior.
	Streaming Subscriber Data, Partnerships and Marketing Propositions	130+ online video service subscriber estimates are available across 35+ countries to help understand streaming strategies. Complementing these are 65+ online video country five-year subscriber forecasts and 2,000+ OTT service/virtual multichannel and market relationships with model, archive, libraries and device data.
	Broadcast TV Station Data	Data on 2,100+ TV stations with advertising and retransmission revenue forecasts, demographics, mapping and network/operator relationships help evaluate potential broadcasting partners to ensure wide audience reach and viewership.
	Expenditures on Sports Rights	An international sports rights database covers deals throughout Europe and APAC, including Premier League, UEFA and Bundesliga. 80+ U.S., 150+ RSN and 325+ non-U.S. team/league network sports rights transactions include deal value, term length and more.

Key Benefits

Members of the strategy team quickly saw the value of having all this information readily available via S&P Capital IQ Pro, a robust desktop platform loaded with productivity-enhancing tools. They were also impressed with the Kagan research capabilities and subscribed to all the solutions that the Market Intelligence specialists introduced. The ballclub was able to engage directly with the analyst team to delve into specific questions on data, trends and insights. Today, they benefit from having:

• Ready access to valuable information, saving time locating details and working in a cost-effective manner.
• Details on the characteristics of their addressable market to examine the size, segments and demographics of their audience to understand the pay-TV and broadband landscape in their local market and beyond.
• An understanding of RSN's cash flow models, sports direct-to-consumer offerings available in the U.S. market and consumer insights on fan behavior.
• Ongoing market monitoring to gain deep insights into the risks and opportunities presented by disruptive technologies and new market participants.
• An extensive selection of prebuilt model templates, reports, and charts to streamline workflows.
• Strong ongoing support from seasoned professionals.