Our intrepid colleague from Chicago unearthed this little nugget yesterday from the Associated Press that caught my attention because, once again, this involves a former colleague of mine:
Major League Baseball hired a high-ranking executive from the Sinclair Broadcast Group as the sport deals with concern over the future of regional sports networks in an era of cord-cutting.
Billy Chambers will start with MLB on Feb. 1 in the newly created position of executive vice president for local media, the commissioner’s office said Thursday.
“Billy is an important addition to Major League Baseball and will play an integral role in how we navigate the rapidly evolving local media landscape in the future,” Commissioner Rob Manfred said in a statement. “Billy’s extensive knowledge and experience in all areas of regional sports network operations will help us maximize the reach of our game in the clubs’ local markets.
Chambers spent 20 years with Fox Sports Media Group, rising to chief financial officer.
During my time with FOX, the FOX regional sports networks were an enormously successful business for a company deeply connected to sports and whose growth as a media empire was directly tied to their bold investments in the NFL and MLB with the mothership network. The unification of regional sports networks was the brainchild of now-Comcast CEO Jeff Shell, who had worked on a project that intended to launch regional offshoots of ESPN in a manner similar to how ESPN Radio was being deployed while in the Disney camp. When FOX realized that many pioneering cable entrepreneurs had successfully carved out feifdoms in local markets where sports rights already were pivoting toward these RSNs, and would often deliver local ratings for telecasts that rivaled most broadcast networks’ entertainment hits, Shell concluded that a national aggregating of them for non-prime time hours, effectively the inverse of how broadcast schedules worked, would yield a very viable business model and, in turn, a cohesive national brand would enhance their value to cable operators. He was, as he often was and has been, fully accurate.
But as cord-cutting became rampant and the lock that FOX had on the RSNs began to diminish as Comcast, AT&T and indeed Shell’s NBC Sports took control of various key markets, the viability of the RSNs for FOX waned. And as part of the agreement that allowed them to unload 20th Century FOX and their entertainment cable networks to Disney, they unloaded the RSNs as well and Disney, in order to comply with federal regulations, in turn sold them to Sinclair. Like FOX, Sinclair owns quite a number of broadcast affiliates and the RSNs, in theory, offered them the chance to enhance their local sales efforts. But as their reach and raison d’etre diminished, Sinclair chose to rebrand them, and take the easy cash, from Bally’s Sports, effectively turning them into barkers for online gambling. While teams don’t shy away from those revenue streams, it doesn’t enhance their overall image, nor does it fully embrace the fanatic experience, to be so branded.
And as the astute Jon Lafayette of Broadcasting and Cable explained, Sinclair’s operation of what is left of this juggernaut has been, frankly, as deftly as a bull navigating a china shop:
The move comes as MLB and Sinclair’s Bally Sports Networks have wrestled over local streaming and direct-to-consumer rights.
With cord-cutting eroding cable and satellite subscribers, regional sports networks have been getting squeezed and are seen as unlikely to be able to continue to pay the big bucks they’ve been spending on local TV rights to baseball games.
Sinclair ran up about $9 billion in debt buying the 21 Fox Sports RSNs from The Walt Disney Co. The RSNs — rebranded as Bally Sports Network — are now operated by Sinclair’s Diamond Sports Group unit, which has been separated from the main company financially.
Diamond Sports also last year named a new CEO, former ESPN and NBC Sports executive David Preschlack, in a bid to build better relationships with rights holders including MLB.
Diamond launched the Marquee Network, which holds the rights to the Cubs, at the outset of the pandemic, and has struggled along with the Cubs. Elsewhere, other teams have gotten more directly involved in their own RSNs, with the likes of the Yankees, Mets, Dodgers and Red Sox having stakes in their own RSNs. Several, notably the Red Sox, are moving toward direct-to-consumer offerings where local online rights are becoming available, for the moment at aggressive monthly price points, but as cord-cutting increases (seen all the more likely with the recent loss of the NFL Sunday Ticket franchise by DirecTV), the opportunities for other teams to follow suit is expected to grow.
And because MLB teams are uniquely positioned to offer six full months (counting spring training) of live content, covering hundreds of hours a year, their upsides are significant. Off the top of my head, markets such as Baltimore, San Diego and Milwaukee are ripe for such opportunities. The AT&T SportsNet markets where the remnants of past top FOX RSNs remain, such as Denver, Houston, Seattle and Pittsburgh are also opportunistic; if and when a team winds up in Las Vegas, that’s added to the mix. Even a market like Tampa Bay, where the Rays don’t draw well, enjoys a fan base and local ratings where the team’s abilities to cut out the middle man, with the assistance of the league, offers promise.
Joining Chambers in this effort will be an incumbent with an intriguing background of his own, as Lafayette also reported:
MLB also promoted Kenny Gersh to executive VP, media and business development.
Chambers will work closely with Gersh, whose role has expanded to include oversight of all of MLB’s national and international media rights, distribution, and production.
Gersh joined MLB in 2006 as an executive at MLB Advanced Media, the interactive media company of MLB.
MLBAM pioneered online sports as the internet grew. MLB.com Radio was a soundtrack for many a cold hotel room or rainy day office setting for me, and being able to listen to the local broadcasters I grew up with was a godsend. As the ability to add TV to the equation grew, the MLB AM technology was far superior to those offered by other sports and even video content providers. Disney now owns that technology and is using it to grow their streaming efforts. Anyone like Gersh who was a part of that will undoubtedly be able to make whatever offerings Chambers and his team can develop look as attractive as anything else anywhere.
Bally’s isn’t going away yet. The reality is that evolution takes time, and fans need a place to watch games. Bally’s did recently secure a deal with fuboTV for its RSNs, and by necessity I now have to factor that into my eventual decision to subscribe to a VMPVD, since I’m indeed intending to cut my own cord shortly. But with the likes of astute minds like Chambers and Gersh at the helm, I’m pretty sure that more DTC offerings, ones with additional bells and whistles way beyond the ability to place prop bets, will be forthcoming.
And, I for one, think that’s a safe bet.
Bully for you, Billy,
Courage…