More Sports Streaming Amazon Magic Coming - For RSNs?

Perhaps looking to expand its success following NFL’s “Thursday Night Football,” Amazon is reportedly looking to make a strategic investment in one area of sports programming that has faced major challenges: Regional sports networks (RSNs).

Unlike other Amazon sports deals, this would involve linking itself to an operator still in the process of major under-the-hood engine repair work. 

The potential deal is with Sinclair Corp’s. ailing Diamond Sports Group -- the biggest U.S. RSN group -- which is in bankruptcy, and desperate to find its way out of $8 billion in debt. 

A resultant deal for Amazon would give the digital media company strong TV-video operational input over 40 major professional sports teams of Major League Baseball, Major League Baseball, National Basketball Association and National Hockey League, teams under the Diamond's Bally Sports umbrella.



Price of the deal? We don’t know for sure. But we can only guess it would be comparably less than what Sinclair paid for those RSNs back in 2019.

In that year, Sinclair closed a $10.6 billion deal for 21 regional sports networks around the country from Walt Disney which was part of a monster $71.3 billion TV/movie operations deal Disney made from then 21st Century Fox.

Now four years later, Sinclair still has $8 billion in debt.

Why? Because legacy pay TV providers (cable, satellite, telco) as well as virtual pay tv providers want no part of this high costs business anymore. 

Heavy video consumer cord-cutting/shaving has been going on. High-price RSNs  --the most expensive programming addition to a standard cable TV bundle plan, upwards of $25/$30 a month -- was the first to get dropped. 

Not only that but pay TV providers have been making very little profit margin, and thus little to no incentive to carry them any longer.

Sinclair’s mistake has been the belief that fanatical local professional sports consumers would always continue to pay whatever price tag an TV operator could dream up. Turns out, that is not the case.

So, going forward, what's the plan? Shifting all RSNs to individual streaming platforms seems the obvious choice.

But those streaming apps would still seemingly need to be priced at a $30/month level that was going to those services under the linear TV model.

Amazon is a big digital media company with boatloads of cash, looking to expand its sports footprint. All this while Sinclair isn’t in a great bargaining position at the moment. You do the math.

What’s the next play? Maybe it's all about packaging, possibly incorporating RSNs into its growing Amazon Prime universe. Using RSNs to pull in possible heavy sports-focused consumers to buy into their ecosystem.

For Sinclair's side of the game -- in baseball parlance -- you are down by eight runs in the bottom of the ninth inning in a playoff clinching game for the other team. Good news. Next year's spring training is just around the corner.

Next story loading loading..