When word came out that Amazon had guaranteed advertisers 12.5 million viewers for its new Thursday Night Football package, most observers poo-pooed the notion that they would get anything close to that and figured Amazon would find themselves in a massive financial hole trying to make up for it with very limited commercial inventory with which to do so, especially any that would be of any use for reaching Americans. As much as leagues and media companies have been rushing to jump onboard the bandwagon of streaming sports events, whenever streaming numbers for events also airing on linear networks have been publicized they’ve been a small fraction of the linear audience, and even events airing exclusively on streaming have received audiences far smaller than what their leagues are used to. Back in 2020, when Amazon aired a Niners-Cardinals game on a December Saturday – the only previous time, to my immediate recollection, that the NFL had aired a non-London game exclusively on streaming – it attracted an audience of 4.8 million, hammocked by games exclusive to NFL Network that picked up audiences of 6.1 and 8.4 million. To be sure, becoming the consistent, weekly home to Thursday Night Football, including games involving popular, valuable, relevant teams, would help Amazon achieve better ratings, but at best they would be in the neighborhood of those NFLN-exclusive games on Saturdays and Thursdays, approaching but almost certainly not passing 9 million, let alone coming close to 12.5 million; even executives within the league itself suggested the expectation shouldn’t be more than 7 or 8 million. Outside of Amazon’s own offices, the question wasn’t whether Amazon’s sky-high guarantees would turn out to be folly if not outright scamming advertisers, it was by how much.
But whatever it was Amazon did or had on its side that no one else was taking into account, be it heavily advertising TNF on anything associated with them, having an established subscriber base, or just having viewership on mobile devices count towards their Nielsen-rated numbers when it counts for no one else, it paid off, in a way that, as Amazon executives would have you think, exceeded even their own expectations. When the numbers finally came in for Amazon’s season-opening game between the Chargers and Chiefs, it clocked in at a whopping 13 million viewers – a number that included viewing on local TV stations in the teams’ respective markets, but even for the most popular teams that shouldn’t ever exceed 1.5 million for any game. (The numbers have fallen below the initial advertiser guarantees in the subsequent weeks, but have remained above 11 million.) It was a jaw-dropping number that hit the sports media Twitterverse like an atom bomb – and could turn out to be a turning point for sports on TV more generally.
Perhaps it was fitting that the day before the Chargers-Chiefs numbers came out, the New York Post reported that the other three traditional major leagues, the NBA, NHL, and Major League Baseball, were working on a deal to buy the Bally Sports regional networks, barely three years after Sinclair Broadcast Group acquired them from Fox by way of Disney. In that time the Bally RSNs have been dropped by most pay TV providers, with DirecTV operating the only streaming TV provider to carry them and Comcast’s Xfinity and Charter’s Spectrum the only other major providers left carrying them, and the threat of bankruptcy has hung over the networks for most of the time Sinclair has run them. Among other things, bankruptcy would effectively absolve the Diamond Sports subsidiary that runs the networks from having to pay their creditors over the course of the proceedings, and arguably no creditors loom larger over the Bally RSNs than the teams whose games they carry. Regional sports networks are the only networks in the cable bundle that have been able to charge carriage fees anywhere in the same stratosphere as ESPN, but despite the popularity of their programming, especially local baseball teams, pay TV providers have increasingly deemed them not worth the expense and have been able to remove them from their lineups with a minimum of fuss, and the cable bundle-fueled revenue flowing towards major league teams has become important enough to their bottom line that for it to dry up could be borderline catastrophic. Sinclair has hoped that launching a direct-to-consumer service could help patch up the RSNs’ ailing financial situation and keep the money flowing, but while the NBA and NHL have allowed Sinclair to hold live game rights to their teams for such a service, MLB has held pat and required Sinclair to fork over more money for those rights, resulting in Bally Sports+ holding live game rights for only a handful of MLB teams.
Major League Baseball has had an interest in the Bally RSNs and controlling its own means of distribution more generally since before Sinclair acquired them. For much of the bidding, Liberty Media appeared to be the frontrunner to acquire the RSNs, and eventually reached a partnership with MLB on their bid after MLB abandoned an effort to bid on their own. Several months after losing the bidding, Liberty chairman John Malone characterized its bid as an attempt to save the cable bundle by moving it to a more sustainable foundation, no longer requiring RSNs to be carried on as basic a package as possible. For its part, while the bidding was still ongoing, MLB Commissioner Rob Manfred acknowledged that the RSN business would probably stop being profitable and saw ownership of the RSNs as a way for MLB to control their own rights as it transitioned to whatever came afterwards. Even after Sinclair acquired the RSNs, when they started trying to launch Bally Sports+ MLB initially demanded an equity stake in the venture, and then started talks to launch their own direct-to-consumer service for in-market streaming, potentially even in partnership with the NBA and NHL, with Manfred publicly insisting that MLB had to “own and control the platform” and would at most accept “partners in the process”.
It would be understandable if there were people in the Sinclair offices who suspected that MLB was intentionally playing hardball on the topic of direct-to-consumer rights to accelerate the company’s path to bankruptcy and effectively force them to sell the RSNs to MLB. But Manfred’s stance is understandable as well: if he has a particular vision for how the transition to a post-RSN future should play out that clashes with Sinclair’s, he’s within his rights to demand that Sinclair pay handsomely to get MLB in line with their vision. There are a lot of unanswered questions about what the post-cable bundle model of local sports distribution will look like, questions MLB wants a hand in answering, and whatever form it takes it’ll generate a fraction of the revenue that RSNs were generating at the peak of the cable bundle. If MLB is going to take part in anything that might hasten the collapse of the bundle, such as a streaming service that would allow fans of local teams to forego it, they’re going to protect their interests as much as possible. That means not only demanding as much money as they can coax out of Sinclair, taking over the RSNs themselves if Sinclair isn’t able to pay what MLB wants, and finding a soft financial landing for MLB’s teams, but also ensuring that MLB games are on a reasonably broadly distributed platform that provides a suitable experience for fans.
That’s where Amazon’s experience with Thursday Night Football comes in. Amazon has shown that a sporting event exclusive to a popular streaming service can attract audiences on par with, if not a linear broadcast network, at least a highly-distributed cable network, and clearly ahead of a lower-tier cable network like NFLN. (Last year’s most-watched MNF game that was neither simulcast on ABC nor had an associated Manningcast, Bills-Titans, attracted 12.53 million viewers.) Of course, Amazon has an in-built subscriber base of people who sign up for Prime for fast shipping more than video, and the obstacles might be higher for a more obscure streaming service airing a less popular sport; Netflix, and possibly ESPN+ with an assist from the “Disney Bundle”, might be the only other services capable of attracting audiences that large (though HBO Max has attracted large enough audiences for House of the Dragon that it might also be capable of reaching that territory, assuming its new bosses don’t ruin it). Still, at least on paper, MLB, the NBA, and NHL don’t have to worry about losing reach just by shacking up with a streaming service. Perhaps more importantly, while there certainly have been complaints about buffering and video and audio quality, for the most part people with strong enough connections have been able to simply enjoy the game, and issues with latency, which Amazon executives set a goal of getting to under five seconds, haven’t been noticeable enough to attract complaints either, suggesting Amazon can deliver live feeds of sporting events to large numbers of people without significant negative effects.
I still think it would be a mistake for America and the world to abandon the technology of linear TV entirely, but Thursday Night Football’s success suggests the cable bundle could be cut down to under 20 channels without most people noticing, and in terms of having enough channels for events that actually need to take advantage of linear television technology, one or two channels might be enough. With cable bundle penetration rapidly declining to the point of almost falling below half the population in the aftermath of the pandemic accelerating cord-cutting, there’s a case to be made that a popular streaming service is superior to cable at reaching the largest audience for the money right now, and that even if a cable network can nominally pay more for rights there’s no guarantee the economics of it will work out more than a few years into the future. That explains why well-connected sports media reporters such as the New York Post‘s Andrew Marchand and SportsBusiness Journal‘s John Ourand have taken the still somewhat unbelievable position that ESPN will launch a full direct-to-consumer product with all of its content within the next two years or so. ESPN has made so much money off the cable bundle that they’d like to wring as much money out of it as possible for as long as possible, to the point that one could suspect it of engineering its own “competition” to prop the bundle up, so you’d only expect them to launch a full direct-to-consumer service if they absolutely have to… and yet, it’s not out of the realm of possibility that that point could come sooner than you think if leagues and other sports entities are convinced that the time has come to fully embrace streaming, or that ESPN could see the writing on the wall even earlier.
The regional sports network market, though, is a lot thornier; while ESPN could theoretically repackage everything it has into a streaming service with little in the way of changes if you didn’t look at how it would work economically, regional sports networks are arguably a creation of the cable bundle and its assumption of linear television as the primary means by which people consume content. While I’ve talked up local sports as the ideal use case of broadcast linear television, regional sports networks are fundamentally a way for the NBA, NHL, and MLB to take advantage of the economics of the cable bundle, a system that fundamentally favors national networks, on a local scale. For a time, Rupert Murdoch attempted to marry the national to the local with his Fox Sports Net project, but that quickly proved unsuccessful at seriously challenging ESPN and eventually collapsed as FSN lost its monopoly over the RSN market; while Bally retains FSN’s national infrastructure and uses it to air gambling-related shows, various college sports packages, and supplemental coverage from significant tennis tournaments aired by Sinclair-owned Tennis Channel, none of it attracts audiences anywhere near the level of its major league sports coverage. For all the massive audiences RSNs attract for MLB, NBA, and NHL games, they might as well not exist when those three things aren’t airing.
So it’s understandable that the leagues would be skeptical about the long-term success of a direct-to-consumer streaming service tied to the existing Bally RSN group, available in an arbitrary selection of markets and tied to a company whose business is entirely wrapped up in linear television, with its streaming ventures directly related to the linear networks it owns, a company the leagues didn’t even choose to own the RSNs. (If MLB couldn’t have bought the RSNs themselves, their preference would probably have been for Disney/ESPN to be allowed to keep them, or for a tech company like Amazon or Apple to buy them.) You can also see why Manfred would be emboldened to play hardball with Sinclair: without the NBA, NHL, and especially MLB, the RSNs would be nothing. Manfred wants the leagues to have full power to set the future of local sports distribution for themselves. But the streaming marketplace is just as national, indeed global, as the cable bundle, so if the future of local sports distribution isn’t a Bally Sports+-style service airing (almost) all the local teams in a limited selection of markets and nothing else, it’s probably going to have to be a single service carrying an entire league’s games along the lines of MLS’s Apple TV+ deal; as noted in that post, Comcast considered and rejected the notion of airing content from its RSNs on Peacock in large part because they’d have to charge different rates in markets with and without NBC Sports RSNs.
In the same discussion where he talked about his reasons for MLB’s original bid for the former Fox RSNs, Manfred said, “There’s tremendous revenue disparity in our game, and I think that if we had more of a national model closer to where the NFL is it would solve a lot of those competitive issues for us, kind of level the playing field…Our game has always had sort of a national broadcast component that’s come out of New York. But the bulk of our business has been local. And the idea of a central baseball having more control over local rights is one that’s really intriguing to us. If we do the transaction, we’ll do it on the theory that we will try to accumulate more.” In other words, Manfred’s vision of the future of local sports distribution is probably already something along the lines of the MLS/Apple TV+ deal, where the league works with a single company to produce every one of their games. But that deal is set up such that everyone has access to every MLS game with a single subscription regardless of where they are, and that’s not likely to fly with the major leagues and especially MLB; thanks to out-of-market streaming services such as MLB.tv, it’s already easier for cord-cutters to follow an out-of-market team than one that’s considered in-market, and I’d imagine the last thing Manfred wants is to make it so that it’s just as easy for someone to follow the big-name teams like the Yankees and Red Sox all season as it is to follow their local team. (They could still set it up so that the revenue is distributed relatively equally regardless of what games are actually being watched, but I don’t know if the big-name teams would stand for that and it would probably still be bad for ticket sales of lower-profile teams when the big-name teams aren’t in town.) I would imagine Manfred and his colleagues at the NBA and NHL would want to arrange things so that whatever service they set up or reach a deal with would unlock access to in-market streaming at a lower tier than out-of-market streaming.
Manfred’s desire to “accumulate more” could bear fruit pretty quickly as well: both Comcast and Warner Bros. Discovery have been widely speculated to be thinking about unloading their own regional sports networks (Comcast seems to be less interested in selling, but it did just sell its DC-area RSN to the owner of the teams it carries, and the value of the RSNs is limited if Comcast can’t bundle their content with Peacock), and if this three-league consortium acquired them, it would leave Spectrum Sportsnet, home of the Lakers, as the only American regional sports network not at least partially owned by at least one of the teams it carries, and if Sinclair were to unload its stakes in Marquee Sports and the YES Network, the latter would be the only other network not wholly owned by a league or team. Acquiring all those RSNs would likely be an expensive undertaking, but it’s likely to only become more and more viable; Disney had hoped to spin off the Fox RSNs for $20 billion but Sinclair acquired them for half that price, and now Sinclair is hoping to get just $3 billion out of unloading them onto someone else. As the cable bundle shrinks RSNs are likely to be worth less and less, allowing the leagues to potentially swoop in and pick up the pieces for cheap, creating a single point of entry to everyone’s local teams as well as a mechanism to set the course for and transition to the local sports distribution paradigm of the future.
(The situation in Canada is thornier, as TSN and Sportsnet actually are the mix of national and local networks Fox Sports Net tried to be, partly due to the centrality of Toronto in Canadian sports, especially baseball and basketball, partly because while TSN started as the national sports network and Sportsnet the regional one, TSN still managed to acquire regional rights to some teams while Sportsnet, as literally the only competitor TSN had for national cable rights, was able to score victories FSN never could, culminating in the acquisition of national NHL rights in 2013. But Rogers, owners of Sportsnet, are also the sole owner of the Toronto Blue Jays, while Rogers and TSN’s owner Bell together own a majority of the holding company of the Raptors and Maple Leafs, so while they have larger telecom businesses they’d want to protect they wouldn’t be as much of an obstacle to this as you might think outside the NHL.)
The NHL and MLB just completed their first seasons under a new national TV contract, so they can’t quite unify their rights on both a national and local level the way MLS did for a while. But the NBA, the youngest-skewing of the four major sports and one that just rolled out a new app with an emphasis on highlights, has its national TV rights expiring in 2025, soon enough that there’s already speculation about what they’ll do under their next TV contract. If the three-league consortium were able to acquire the Bally, Comcast, and AT&T RSNs, and the NBA was able to get the Lakers out of their deal with Charter (still with ten years left on it at this point), they could potentially go to market ready to enact a sea change in how people consume the league. They probably wouldn’t abandon ESPN and Turner entirely – unless the cable bundle collapses even faster than I’m thinking – but there’s a very real possibility they dive into the stream face-first and go all-in on a streaming provider or two as the primary conduit for the majority of their games, local and national. That, in turn, would set the stage for what happens when the NHL’s Rogers deal expires in 2026 and the US TV deals for the NHL and MLB expire in 2028.
In all fairness, things probably won’t happen that fast; streaming services are still hemorrhaging money across the board (to the point that the cornucopia of choice available to consumers today probably won’t last) while sports on linear TV continues to be a profitable business overall. But all told, the days of the regional sports network could be more numbered than most people think. The way we consume sports could look very different at the end of the decade than it does now, and if so, what Amazon is doing with the NFL is a big step in heralding the arrival of a new paradigm.