Report: Warner Bros. Discovery to shutter RSNs

Latest twist in on-going saga involving regional sports networks

Adding to the latest saga surrounding regional sports networks – and with weeks to go before the start of MLB season, Warner Bros. Discovery have told sports teams they’re shuttering AT&T SportsNet and asking them to reclaim their rights. 

March 31st is set for the closure, and if WBD can’t reach deals with the teams, the channels plan to move forward with a Chapter 7 filing, meaning they would practically be insolvent. WBD operates four channels involving ten teams, mostly in the Western United States. As the RSNs were once owned by Fox and later Liberty Media, The AT&T SportsNet name is a holdover from the days the telecom giant owned Warner Bros., who separated from them and merged with Discovery Communications in 2021. Warner Bros. Discovery was saddled with a huge debt load, and the new company has been making numerous cutbacks. There are reports WBD had refused to pay anymore money to teams they owed. 

One of those teams affected is the World Series champion Houston Astros, who share a channel with the NBA’s Houston Rockets in AT&T SportsNet Southwest. They signed with the RSN several years ago after the collapse of Comcast SportsNet Houston. The ownership structure of the channels varies, as for example, the Seattle Mariners own a 60 percent stake in Root Sports, another AT&T SportsNet brand. On Saturday, Root Sports president Patrick Crumb told the Seattle Times WBD’s decision to exit the RSN business won’t impact his network, given WBD have a minority stake. Root carries the Mariners, Seattle Kraken, and the Portland Trail Blazers in the Pacific Northwest.

This high-stakes drama comes as the regional sports network business is on the verge of collapse with cord-cutting and high expenses taking a toll amid a shift to streaming – not to mention their high per-customer-price has kept away vMVPDs (Hulu + Live TV, YouTube TV, etc.) in order to keep their subscription rates low. Sinclair subsidiary Diamond Sports Group has skipped a payment, triggering a 30-day grace period where they are expected to file for Chapter 11 bankruptcy, and plans to continue producing games through the process. Diamond owns the Bally Sports Net chain. 

Bankruptcy is nothing new to media companies; among those who filed for Chapter 11 in recent years include the former Tribune Co., Cumulus Media, and iHeartMedia. Cumulus’ bankruptcy filing enabled them to get out of unprofitable sports rights deals including those for the Chicago Bulls and Chicago White Sox, who each had a short stint at the company’s WLS-AM. Sports teams can get out of those deals when Diamond eventually files, and MLB has already talked about reclaiming rights to teams affiliated with Bally. 

Other companies are knocking on the door with broadcasters Scripps and Gray Television looking to get into the sports business as they could be potential suitors for AT&T SportsNet and possibly others. 

With AT&T SportsNet and Bally in bankruptcy trouble, all eyes are likely to turn to NBCUniversal – the other media company who operates multiple RSNs, including NBC Sports Chicago, who the ownership of Bulls, White Sox, and Blackhawks each have a stake. The deal with NBCUniversal ends in October 2024 and it would be interesting to see how the teams move forward in a changing television atmosphere, as NBC Sports Chicago is earning poor ratings due to each team’s lackluster performance on the court, diamond, and ice respectively.  

RSNs featuring teams on more solid financial footing – YES (New York Yankees), Marquee (Chicago Cubs), Spectrum SportsNet (Los Angeles Dodgers and Lakers), and NESN (Boston Bruins and Red Sox) – aren’t affected by the ongoing RSN drama – so far.