Something often missed in discussions of broadcast television is that many consumers receive those broadcast stations not from an over-the-air signal, but rather through pay-TV packages from multichannel video programming distributors (cable, satellite, or virtual MVPDs). The retransmission consent fees those stations bring in are a key part of the economic picture for them. And many of those have been on the rise lately, including around sports. And sports programming has been a key part of many of the carriage disputes that have shown up with those stations.
Retrans fees and carriage disputes are an important element to keep in mind around the many notable rights we’re seeing move from regional sports networks to local broadcast stations. And they’re one of several reasons some are saying these moves to broadcast TV aren’t going to solve all the issues seen with RSNs. Some recent interesting comments there come from DirecTV chief content officer Rob Thun on The Marchand and Ourand Sports Media Podcast, with Thun saying the carriage battles DTV has already had (or come close to) with several companies that own lots of local stations may happen again as stations get more into sports rights:
Thun warned that broadcast deals inevitably will create the same problems that affected RSNs. As local broadcasters pay more for sports rights, they will charge distributors more in retransmission consent fees.
Thun pointed to carriage battles DirecTV has had with Nexstar, White Knight and Mission and suggested that the business would see more of these battles if local broadcast gets more involved with sports rights.
“We’re going to see a replay of this down the road because the broadcast stations are also too expensive and they’ve been asking for crazy increases over the years and we’re hitting a point where [we’re asking] ‘do the broadcast channels make sense,’” he said. “We’re going to see more broadcast fights if the broadcasters are going to try to assume these rights and then impose it upon us.”
This isn’t the only potential issue. Thun also notes challenges with games being carried on subchannels (specifically with the Arizona Coyotes, whose games are headed to Scripps-owned KNXV.2, the alternate channel for the Phoenix ABC station), citing limited satellite room and saying “Our mousetrap of satellite was not built to accommodate all the subchannels across the country. We have a tough time delivering all the primary signals across the country, let alone subchannels.”
Thun also mentions that many broadcast stations don’t have as wide of a footprint reach as RSNs did. Thus, parts of teams’ broadcast territory may wind up excluded if they’re not able to sign syndication deals. And that’s notable too. But the discussion about retrans fees and carriage battles is particularly interesting considering how many disputes we’ve already seen over local broadcast networks (with those disputes often featuring sports), and with many MVPDs beyond DirecTV.
Of course, it’s important to keep in mind that Thun’s perspective is from someone who works for DirecTV. And while some of the concerns he raises are likely shared by executives at other MVPDs, some are specific to his company.
And Thun is making these comments on local broadcast deals as part of a discussion of a preferred alternative. He told Ourand and Marchand DirecTV likes the league distribution model they wound up with this season with the San Diego Padres and Arizona Diamondbacks after Bally Sports dumped those teams during their bankruptcy process.(Interestingly enough, Bally parent Diamond Sports is still trying to have DirecTV pay them for games Diamond did not supply.) Here are some of his comments on that:
As RSNs continue to struggle, DirecTV is pushing for a "league-driven model" like MLB is pursuing.
Listen to the Marchand & Ourand Sports Media Podcast here:
Apple: https://t.co/p63oY2kNGe
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Google: https://t.co/SKcawwzKSZ pic.twitter.com/rG0Y7JKELC— John Ourand (@Ourand_Puck) October 25, 2023
That doesn’t write off the issues Thun is raising. But his background and position should be considered when evaluating his comments.
It’s also worth noting that shifts to broadcast TV can have plenty of benefits for viewers. For one thing, many more people have access to those broadcast networks. And part of that is that for those who do access broadcast networks through a MVPD, those are often in a more basic tier than RSNs were.
And there’s also always the ability to get broadcast networks for free outside a MVPD package via an antenna. That’s something often utilized by one side or another in carriage dispute talks, and it’s a way for consumers to avoid the impact of disputes over broadcast networks.
And the numbers of people with no MVPD package are growing. And that may continue, especially as a lot of programming formerly requiring a bundle is now available a la carte through different content companies’ streaming services (and that’s only going to continue to rise), and as a lot of sports programming formerly cable-only is showing up on broadcast networks.
But with all that said, Thun’s remarks here are certainly notable. And it’s interesting to hear the specter of increased retrans fees and looming carriage battles already being raised around these local sports broadcast deals. We’ll see how that all shakes out down the road.
