Can Bally Sports Thrive in the Modern Era with a Strategic Embrace of Sports Betting?
As streaming services surge, the traditional Regional Sports Network (RSN) model faces a crisis, putting Bally Sports in jeopardy. Dive into the unfolding challenges and potential solutions.
Bally Sports, formerly known as Diamond Sports Network, is in trouble as the regional sports network (RSN) model is cracking. Image Source: newscaststudio.com
The Profitable Legacy of RSNs:
RSNs are local cable channels that broadcast sporting events of local teams in U.S. professional sports leagues, mainly the NBA, MLB, and NHL. Sinclair, which owns Bally Sports, paid about $2 billion annually for the broadcasting rights to roughly 50% of teams across the NBA, MLB, and NHL.
This local broadcasting model has been hugely profitable, with RSNs costing each customer between $5 to $7 per month, and everyone pays for it, whether they watch sports or not. This model has produced enormous cash flow for sports teams over the last several decades.
However, the RSN model has been cracking for several years as consumers continue to migrate away from traditional cable TV to streaming services, with the number of pay TV households in the United States dropping from 100 million in 2014 to roughly 65 million today.
This trend is a significant problem for Bally Sports, as the decline in pay-TV households directly affects their revenue. The failure of RSNs will have a significant impact on local broadcast rights for teams across the NBA, MLB, and NHL.
Diamond Sports currently holds the local media rights for 42 teams across the NBA, MLB, and NHL, and televises roughly a third of the games across those leagues and owes teams $2 billion in rights fees this year alone.
Betting on Sports Betting
Moreover, Sinclair rebranded Diamond Sports’ assets as Bally Sports Network to take advantage of legal sports betting through their aptly named, Bally Bet sportsbook. However, the sports betting industry is highly regulated, and only a few states have legalized it. Thus, Bally Sports may not be able to make up for the loss of revenue from declining pay-TV households.
Therefore, Bally Sports might be in trouble in the future as the RSN model is not sustainable, and consumers are continuing to move away from traditional cable TV to streaming services.
The decline in pay-TV households directly affects Bally Sports’ revenue and might cause them to default on their debts and file for bankruptcy. Thus, Bally Sports needs to come up with an alternative plan to sustain its business model in the long run.
The 2022 Total Estimated Handle data clearly shows that Bally Bet lags its competitors in the New York sports betting market. With a handle of only $6,578,521, compared to BetRivers’ $416,610,790, WynnBET’s $94,963,866, and Resorts World Bet’s $57,847,306, Bally Bet faces a significant challenge in capturing a larger market share in New York.
To compete effectively in this lucrative market, Bally Bet must prioritize strategies to expand its presence and attract more bettors.