Think watching sports on TV is getting complicated? Buckle up for what's next

The future never arrives all at once, especially when big money is involved.

The way we watch sports on television has been changing rapidly, and with each passing month in spring of 2023 we are speeding toward an undefined distant point faster than ever. A ruling expected to come on the last day of May could shake up the sports-watching future in Minnesota as much as any recent change.

Keeping track of all this movement, understanding why a transformation is underway and forecasting what is yet to come is complicated.

But it is of the utmost importance to sports fans, most of whom only want two main things: To watch the game they want, at a price they consider reasonable.

That has been an increasingly fraught proposition in recent years, particularly when it comes to regional sports broadcasts of local pro teams — in our market, the Twins, the Wolves and the Wild, and the Lynx and the Loons.

The national picture is even more complex as leagues leverage new platforms to divide up roughly the same number of games into more packages — for more revenue.

Amid this swirl of all that has happened and what might happen next, this feels like a good time to pause and get everyone on the same frequency.

How did we get here?

The model for watching local teams on TV was stable for many years. A large regional sports network offered the vast majority of games to in-market viewers, who paid for access as part of a larger cable or satellite bundle.

There were gripes about cost, particularly from folks who could remember games being shown over-the-air for free, but mostly there was harmony. Teams made money by selling rights fees. Regional sports networks (RSNs) made money via subscriptions, and viewers had access to what they wanted for an agreed-upon cost.

A disruption to the model, though, started a little over a decade ago. Subscribers to cable and satellite, frustrated either by rising prices or by having to pay for channels they did not want in order to get the few they did want, started "cutting the cord."

A rise in streaming services like Netflix, and eventually those like Hulu, Sling and YouTube TV — which offered live TV and live sports at a fraction of the cost and commitment — further eroded the cable/satellite base.

But the real turning point came in 2019. That's when Diamond Sports Group (a subsidiary of Sinclair) purchased 21 regional sports networks from Disney, stations previously owned by Fox, for $10.6 billion.

Three things that followed sent Diamond Sports into what can only be politely described as a freefall:

• The deal was financed with a lot of debt. This would prove to be disastrous as other market forces took hold.

• Cord-cutting accelerated. More people ditched cable and satellite, the lifeblood of the RSN model.

• Diamond Sports was unable to broker new carriage deals with several streaming services. That meant sports fans in Minnesota who had signed up for low-cost, no-obligation subscriptions with Sling, YouTube TV and Hulu lost access to games carried on Bally Sports North.

Immense frustration, among fans and teams, followed, plunging subscriber numbers. A recent Business Journal story reported that there were 2.9 million subscribers to Bally Sports (then Fox Sports North) in 2013. In 2023: just 1.2 million — with the vast majority of those lost subscribers dropping in the past five years.

Bally Sports North did introduce a standalone app at a $20 per month cost before the start of the most recent Wolves and Wild seasons, but the channel does not have the digital rights to Twins games and therefore cannot stream them, adding to fan frustration.

When local fans lost access to games, they vented. There's not a single subject about which I get more emails than this one. Many moved on to other interests in life, or pirated illegal streams of games.

Why do I need to start paying attention now?

Diamond Sports' financial woes came to a head in March when it declared bankruptcy. That move pushed a lot of hypothetical, what might happen in the future questions into more immediate focus.

The three leagues most impacted by regional sports networks – the NBA, NHL and MLB – accelerated planning for a future without Diamond Sports.

MLB in particular has been very frontal about making plans to produce and distribute games in the event that it becomes in control of rights.

How does this impact Minnesota teams?

The Twins are the most affected team in the near term. They are in the last year of their contract to show games on Bally Sports North — a contract that pays the team more than $40 million a year — and they should be described as very interested in pursuing another option.

Even though Bally Sports North is showing Twins games this season, Diamond Sports skipped a payment to the Twins at the start of the season. A bankruptcy judge is slated to hear arguments from MLB and Diamond Sports on May 31.

If a ruling goes in favor of MLB, there's a chance that the league could take control of Twins games in the middle of this season and show them through alternative means that would include both cable/satellite and streaming. The same could happen to other teams, including the Padres, according to a recent Sports Business Journal report.

The Lynx are in the midst of a season during which 31 of 40 games are slated to be shown on Bally Sports North.

The Timberwolves and Wild have less urgency; they do not resume play until October. But both teams also rely on rights fees for revenue and could find themselves searching for new TV solutions.

What about the national sports broadcast picture?

National broadcasts don't face the same financial squeeze as local broadcasts. Rather, rights fees continue to soar, driving up franchise valuations, player salaries and college athletic department budgets.

One of the bigger questions that the largest leagues are wrestling with, though, is whether maximizing the monetary value of large contracts spread over multiple traditional and streaming outlets is worth the trade-off of potentially alienating or confusing TV viewers.

The NFL is a great example. Most games are on CBS, ABC, Fox and ESPN/ABC. If you want the Sunday Ticket package that shows all the games, those rights now belong to YouTube. If you want to watch the Thursday night games, those are on Amazon Prime Video. If you want to watch all the playoff games, you'll need to add Peacock because NBC's streaming partner was just awarded a wild card game.

Almost all games in home team markets — the Vikings in the Twin Cities, for example — are available over the air, and there are no local TV contracts to muddy the waters. But NFL fans wanting access to every game next season will spend a lot of money.

Other leagues have experimented, too. In addition to those 31 games on BSN this season, for instance, the WNBA's Lynx will have games shown on national TV via ESPN and Ion as well as streamed on Amazon Prime Video, Twitter and Meta VR.

Major League Soccer, on the other hand, has made it simple for fans to watch – for a price. Every MLS match in 2023 is available via a subscription through Apple TV. While that's a solution leagues with a larger TV audience aren't yet ready to try, they are definitely watching to see how the year plays out.

MLB seems to be angling for a future that includes having local games shown traditionally through cable/satellite carriers and via streaming packages, aiming to give fans their choice.

Baseball's interest in taking control of broadcasts in the future is layered. Executives in the league and with individual teams have been alarmed by the loss of potential viewers via traditional cable/satellite in the last decade and frustrated by the RSN model.

They also see a new regional broadcast model as a path to creating more equitable revenue splits among smaller and larger market teams – something that could benefit the Twins depending on the final solution. A team like the Dodgers currently brings in more than $100 million more per season in local TV revenue than the Twins.

Leagues like the NBA and NHL, which have strong national TV deals, are in an interesting place when it comes to the future of both their regional and national contracts.

The NBA in particular is one to watch. All of their national contracts are up after the 2024-25 season, and a league that is both immensely popular and innovative could be a model for other leagues in both maximizing revenue and making consumers happy.

Of particular note: The NBA's Phoenix Suns are attempting next season to shift all their local games off of Bally Sports and onto a combination of a free over-the-air channel and a paid direct-to-consumer streaming option. That contract is on hold because of Diamond Sports' bankruptcy proceedings, but the Suns' intent is to reach more fans even if it costs them revenue.

What is the impact on viewers?

If it does all truly come down to watching games at a reasonable price, the future might be better for some fans than others.

MLB's possible future controlling broadcasts via cable/satellite and streaming has been described as less lucrative than the current RSN model. It might be a necessary change if the RSN model is unsustainable, but how will teams and leagues make up that revenue gap?

As games get even more fragmented, each nickel and dime can add up. If each individual team or sport is trying to sell you subscriptions, the net result could very well be more expensive than paying for a cable or satellite bundle.

But if you are more a fan of one team — the Twins, for example — an option that would let you pay for just that access surely would be less expensive than paying for a bundle that gave you access to things you didn't want.

Viewers tend to know what they want. They have become increasingly adept at finding games in multiple ways and navigating smart TVs.

They are also not above finding content through illegal means if they find prices too high or access denied. It was estimated that in 2022, almost 4 million viewers streamed sports through illegal sites.

Viewers in the future will have a lot of places to find things and even more options of what to watch. There will not be a one-size-fits-all model, and more programming will be provided à la carte. All of that will come with a price.

The future, as always, means change. And it's coming faster than you might think.

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[ SPORTS ON TV ]

The Star Tribune is increasing its coverage of major changes in broadcast sports this year, with Michael Rand leading the way. This is his first installment. On May 31 and June 1, look for coverage of a ruling in Houston on Wednesday that could signal a huge shift in broadcasting for Twins games, baseball games and more.