But are regional sports networks in the same category — given the possibility of eroding subscribers? Maybe not so much.
One analyst's note — focusing on Sinclair Broadcast Group, concerning its purchase of 21 RSNs for $10 billion in 2019 — thinks it's not all it's cracked up to be.
For example, Sinclair's exposure to its RSNs is now higher than the company's book value. And second, Sinclair's capital market access appears to already be impaired as a result of the RSN deals.
Given the price of Sinclair’s stock, its valuation to some, means Sinclair is more a sports TV company than big owner of TV station group.
It hasn’t helped that Sinclair’s RSNs have not be on Dish-Sling TV since July 2019, due to contractual issues. Dish Network's total U.S. subscribers is now 12 million and drifting lower. That makes for a tougher financial situation for Dish, and other pay TV providers, where subscribers may be shying away from extra premium-priced networks/apps, where RSNs usually reside.
For his part, Charlie Ergen, founder-chairman of Dish Network, says those Sinclair RSNs are worth even less in value today than last year.
Previously, Ergen said the math for modern pay-TV providers makes things obvious, that a “very small fraction of [Dish] customers are avid viewers of the regional sports.” He said the savings from dropping the RSNs would benefit more customers than hurt.
Perhaps this isn’t the same for bigger, more nationally oriented sports TV brands — ESPN, Fox Sports, NBC Sports, and the like — where customers can dabble in many high-profile, wide-appeal sport programming, which is included in a basic pay-TV plan of networks.
In 2019, S&P Global Market Intelligence’s Kagan said sports programming networks for pay-TV providers represented 22.1% of average revenue per user cost in 2018 — $18.55 per user — up from 14.1% in 2009.
Here is a key financial data point: An average regional sports channel sets pay-TV providers back an average of $2.63 per subscriber per month — more than double the average cost per channel of 49 cents, according to Kagan.
With modern TV-video consumers looking to pair down their pay TV monthly bills to only necessary networks, RSNs might have a tougher time keeping decent scale going forward.
During a fourth-quarter earnings conference call this week, Ergen said: “Programmers have a hard time understanding that once somebody leaves their network, there's no reason to put something back and tax the rest of people ... So, the math was clear.”