Potential Game Changer in Regional Sports Networks

Look out Fox Sports Net, Comcast SportsNet and other regional sports networks, there could be a new bully in your neighborhood. According to Multichannel News, Screen Capital International has launched a new affiliate, RSN Partners, whose goal is to help teams establish their own regional sports networks.

The competitive landscape for regional sports networks could be on the brink of a game changing moment

Networks like YES and NESN, owned at least partially by the Yankees and Red Sox, have been trend setters and other teams, leagues and college conferences have taken notice. In the last 10 years league driven networks from the NFL, MLB, NBA and NHL dot the landscape that was once dominated by just a few national network powerhouses. While collegiate conferences such as the Big Ten Network and Mtn. continue to carve out their niche and grow their base rapidly.

Screen Capital International is a highly respected media and entertainment finance specialist who has retained veteran sports media consultant Lee Berke. Berke was was instrumental in establishing YES Network and Comcast SportsNet Bay Area:

“The team RSN business continues to grow. Just look at the landmark deal between the Los Angeles Lakers and Time Warner Cable. The financial community recognizes these opportunities, but there are risks involved in setting up these networks, relative to distribution and equity, and much of it has been done on ad hoc basis. RSN Partners is looking to become the one-stop shop for these types of financial resources.”

In a recent twitter conversation with Forbes Sports Business expert Tom Van Riper, I asked “does the team owned RSN model really pencil? YES Network was highest revenue generating RSN at $400 million, which the Yankees own 34%, back out operating expenses and is the difference much more than MSG would have paid in broadcast rights?”.

Van Riper replied “team owned RSN does better on upside, but more dependent on team winning”.

There is the inherent risk – success. That’s why collegiate networks could be the most judicious path. Highly successful programs tend to be more consistent and have very passionate fan bases. Now factor in student labor to work on the crews and reduce overhead, its a winning proposition. Look at the new ‘Longhorns Network’ dedicated to University of Texas athletics – listen closely can you hear UCLA, Ohio State and Florida saying ‘hey what about us?!”

Professional teams goes through more up and down cycles and the down cycles could cripple a network. When I worked at Fox Sports Northwest we were very concerned after the Mariners 116 win season they would consider launching their own sports network. At the time, their games were routinely bringing in remarkable local ratings in the 20′s, if they wanted to bring that in-house it would have severely damaged our regional viability. We figured they would try to pair with the Sonics and create a year-round network.

In the end the Mariners decided not to launch their own network and by Van Riper’s belief that RSN success is tied to winning, it was a smart move. Since that 116 win season they have a combined record of 691-767 and the Sonics moved to Oklahoma City.

While the risks are real, the upside of team owned RSN can be huge. With an investment company like SCI helping to foot the bill and provide a ‘one-stop shop’ for team operated RSN’s the risk may be minimized and more teams may make the leap. This is an exciting step for those interested in Sports Media careers, the more money backing team sponsored networks, the more job opportunities there will be.

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Article by Brian Clapp

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