Instead of launching a subscription-based streaming product, the Dallas Stars are looking into one that would be free, albeit with ads.
Per the Dallas Morning News, the Stars and A Parent Media Company (APMC) are working on a streaming app that would offer live games to fans for free. The app would be flush with ads to pay for it, rather than through subscription fees.
The product’s launch doesn’t appear to be imminent. Stars president and CEO Brad Alberts said it was “an option if Bally isn’t an option.”
“We have to be prepared,” Alberts said. “It’s all about where is Bally? Do we have an RSN or not? We have to have contingency plans. This certainly is an option if Bally isn’t an option.”
Stars games air on Bally Sports Southwest and can be streamed on the Bally Sports app. Without a cable or satellite subscription, in-market fans can subscribe to Bally Sports+ for $19.99 a month. That includes access to Dallas Mavericks games, but not the Texas Rangers, who didn’t sell their streaming rights to the Diamond Sports Group, parent of the Bally Sports RSNs.
Alberts called the ongoing woes with Bally “one of the most complicated business issues” he’s ever dealt with.
“It’s one of the most complicated business issues I’ve ever worked through,” Alberts said. “Certainly, the challenge is to fix the two problems that we have right now, which is distribution and money to the teams.”
The Stars signed an 11-year deal with what was then Fox Sports Southwest in 2014, and while the value was not announced, Forbes reported in 2013 that the Stars were making $20 million annually.
Alberts said the franchise was dependent on revenues, but was “getting comfortable” with the possibility of going with a direct-to-consumer (DTC) product.
“Nobody wants to lose money,” Alberts said. “We’re dependent on revenues. We’ve got to pay the players. I’m getting more and more comfortable with the economics.”
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“Everything’s on the table at this point,” Alberts said. “It comes down to what’s everybody’s risk tolerance? We’re getting comfortable with potentially having to go direct-to-consumer. I think that’s the future.”
I agree with Alberts, but attempting to make up that gap with digital ads seems….well, optimistic. If the Stars launched a free app offering live games in-market, any broadcaster looking to air the team’s games, be it Bally or another network, would dramatically cut their offer. Why pay millions for a product the team is offering for free?
This strategy from the Stars is certainly a unique one that would stand out from the rest of the pack, but it might not be as ideal of a solution as the team seems to believe.
