Inside the NHL
“Back to the Future” is a 1985 science fiction comedy film starring Michael J. Fox and Christopher Lloyd that is the last time most sports fans watch their favorite team’s televised games on a free antenna channel. It was published in the last 10 years.
Of course, those free games were limited to one or two per week. But it’s still free. Pay TV was still in its infancy, but by the start of the Regional Sports Network (RSN) model in the 1990s, fans willing to pay could watch most games on their favorite team’s schedule. became.
Unfortunately, even viewers who didn’t want to pay were often forced to bundle cable packages. This has led to a rise in the valuation of the RSN model itself. Not to mention, sports salaries paid by teams to their star players, largely based on revenue from cable packages, have also skyrocketed.
Thirty years later, everything is falling apart as TV viewers ditch cable in favor of streaming and teams and RSN operators scramble to find a future. One option that is increasingly being looked at by teams, especially NHL teams such as the Kraken seeking a wider audience, is to broadcast games on free channels like they did in the 1980s and earlier, “Back to the World.” This approach can be compared to that of “Future”.
The difference now is that instead of one or two games each week, the majority are freely accessible. It is wonderful. Well, there are obstacles. But at this point, his current RSN model is unsustainable and as a sports fan we should be very concerned.
Here in Seattle, we’re seeing the not-so-pretty effects of the demise of the RSN model on two team fronts at ROOT Sports Northwest.
The Kraken’s annual television rights fees paid by ROOT Sports are said to be within the standard $15 million to $30 million range for NHL teams, but they have the ability to grow the product as they see fit. I haven’t been able to do that. We’ve previously mentioned that Kraken ticket demand lags behind online resale exchanges, and this reflects a lack of demand that goes beyond just the team’s poor performance.
A great way for new teams to increase interest is television. But the “attention” for Kraken games is just not there because fewer people are paying for packages that include ROOT Sports.
Despite a strong showing in last spring’s playoffs, the Kraken’s first eight games of the season, played on ROOT Sports in October, averaged just 13,781 viewers and a 0.7 rating. Last season, the October Kraken averaged 15,103 viewers over nine games and a 0.7 share on ROOT Sports.
As a result, viewer ratings remained flat every year. This isn’t the exposure her third year franchise needs, considering it wasn’t a great production to begin with.
Indeed, optimists believe that Comcast-owned You might consider it a bonus that it remains flat. So fans had to pay an additional $18.50 per month.
Still, avid sports fans typically pay whatever it takes. Considering that Kraken games were already watched primarily by hockey enthusiasts, it’s not all that surprising that this number was maintained despite the higher costs.
But it’s the more “casual” or “new” hockey fans that the Kraken desperately need. And Xfinity’s price increases didn’t help.
The Kraken broadcast is one of the best in the league, headlined by Jon Forslund, Ed Olczyk and JT Brown, analyzed by Allison Lucan and Nick Olczyk, and reported by Piper Shaw. However, all that talent did not translate to the audience.
So why shouldn’t broadcasting be free? Would you like to keep the same staff fully under the team’s umbrella and partner with one or two local antenna channels to broadcast the games there? NHL teams already pay more in local rights fees than MLB or NBA teams. They are much less likely to explore this route.
Certainly, subscription-based RSN services won’t earn the same amount of money as before. At least not right now. In exchange, the revenue earned from advertisements sold on free-to-air broadcasts will be shared with channel operators.
But will there be new viewers? Wow, those will be there.
Just ask the Las Vegas Golden Knights. AT&T Sportsnet RSN reportedly went free to air this season after its partner withdrew. Vegas partnered with Scripps Sports to screen his 69 Golden Knights games for free across multiple state territories.
Through five games in October, they had already played 135% more games on ESPN and TNT than last season on national cable and averaged a whopping 8.5 share of the Las Vegas market.
“The incredible growth in viewership and engagement for the Golden Knights this year should remove any doubts about the ability of terrestrial broadcast channels to serve sports fans,” said Brian Scripps Sports. President Lawler said in an article last month. release. “The Golden Knights wanted to reach more fans, and they clearly are doing that.”
And reaching new fans generates revenue beyond television through future ticket, merchandise sales, increased sponsorship, and more. So what’s stopping the Kraken?
Well, they have two more seasons under contract with ROOT Sports after this season. The NBA Portland Trail Blazers have one more.
What no one says publicly, but many in the sports industry are wondering, is whether these deals will survive.
Another Seattle-based team directly affected by the RSN model meltdown is, of course, the Mariners, who are majority owners of ROOT Sports with AT&T Sportsnet as a minority partner.
When Xfinity raised its prices, the Mariners and Kraken alike howled. As much as the Kraken were worried about losing potential viewers, the Mariners were paying millions of dollars in broadcast rights fees to generate and grow NHL viewership.
You would have to think the Mariners are looking for a way out of their contracts with the Kraken and Blazers now that their potential for growth is being stunted.
When the Mariners were sold to John Stanton’s group in 2016, ROOT Sports was valued at approximately $175 million for purposes of the sale. The amount was then estimated to be closer to $300 million or $400 million, depending on various industry valuation metrics.
And the Mariners, armed with that asset, increased spending on player personnel accordingly. It wasn’t as much as many fans had hoped for, but it was still satisfying.
But now that sense of security is gone, as the RSN model has drained subscribers and value across the United States. Did you expect the Mariners to spend a huge amount of long-term money on free agent Shohei Ohtani? sorry. Smart money ruled out that possibility last February when RSN’s bankruptcy and closure began.
The Mariners now have to worry about what will happen to their ROOT Sports assets, which are now worth nine figures, and the revenue that comes with them, if they become like Blackberry cell phones or Kodak film.
As for the Kraken, it needs more fans. Their next step should be to go beyond the obvious of winning more games and go “back to the future” and move away from the mushroom cloud of RSN models as quickly as possible.