The future of the NBC Sports RSNs is murky. Per the Wall Street Journal, the company has looked into two very different strategies regarding their seven regional sports networks.

The first strategy: streaming, of course. Specifically, streaming on Peacock.

Early this spring, NBCUniversal planned to start streaming NBC Sports Philadelphia, which broadcasts the city’s pro basketball, baseball and hockey games, the people said. The goal was to be up and running in time for the Major League Baseball season that began in April.

The plan was halted over concerns that it would conflict with the broader streaming strategy of NBCUniversal, a unit of Comcast Corp., the people said.

This is a natural progression in streaming strategy for RSNs and the teams and leagues on those RSNs across the country. MLB is trying to work with its RSNs to get a direct to consumer offering off the ground, which would be a welcome change from the standard authenticated local streaming situation.

Several issues popped up, including the need for permission from all the leagues and a potential price increase for Peacock in each market (with Philadelphia being used as a test market).

If the plan had moved forward, fans in the Philadelphia market would be able to stream the local teams’ games. To offer the games to fans outside Philadelphia, NBCUniversal would need permission from leagues, which have their own apps offering such “out of market” viewing.

One issue for executives at the company was pricing, people familiar with the situation said. Peacock subscribers in Philadelphia would have to pay more for the service than Peacock subscribers in markets without a regional sports network, a situation the executives feared would confuse the service’s marketing, the people said.

But putting the RSNs on Peacock could theoretically hurt NBC’s bottom line more than it helps. Yes, there are inevitably people who want to watch their local teams who have cut the cord, haven’t subscribed to Peacock, and would dish out the $5 or $10 per month in order to do that. But there are probably even more people who subscribe to a Comcast cable package just for local RSN access, and would cancel their subscriptions and replace them with the far cheaper Peacock sub. How many new Peacock subs would be needed to outweigh one cancelled cable sub?

The other option would be a sale of the RSNs. However, there isn’t a great suitor available: Sinclair is still in financial pain from its purchase of the Fox RSNs, AT&T wants to sell off its RSNs (and hasn’t received suitable bids), and the teams that own percentages of the NBC RSNs have reportedly not been seriously interested.

The WSJ article also discusses Sinclair’s plans for streaming packages targeted at cord cutters, which could cost up to $30 (!) per month.

Sinclair, the largest owner of regional sports networks in the U.S., is working on offering two streaming tiers, one without games but with content associated with the teams and another at a higher price that would show live games, Chief Executive Chris Ripley said in an interview.

“Look at how much fandom is outside of the pay-TV bundle—it’s quite significant and it’s been growing faster over the last couple of years,” Mr. Ripley said. “We think there’s millions and millions of subscribers just for our service alone.” Sinclair’s sports networks had 52 million subscribers in late 2020.

Pricing has yet to be decided for Sinclair’s regional sports networks, but analysts and industry experts estimate an individual channel with live games could cost $30 or more a month.

Go big or go home, I guess.

But as 2021 rolls along, it’s clear that the RSN model is seriously in trouble. The pandemic has exacerbated issues that had been bubbling under the surface for years, and now Sinclair, NBC, and AT&T, along with the NBA, NHL, MLB, and their teams, will have to contend with these issues before the bubble violently bursts.

[Wall Street Journal]

About Joe Lucia

I hate your favorite team. I also sort of hate most of my favorite teams.