The app on this site’s front page details how much money you give to pro and college sports leagues via national cable networks like ESPN and TNT. These national networks, however, aren’t the whole story.
Regional Sports Networks (RSNs) also make up a huge chunk of your cable bill. These are the channels that strike deals with individual pro and college teams to air games of local interest. Live in St. Louis? Fox Sports Midwest has the Cardinals and the Blues. Got cable in Phoenix? Fox Sports Arizona will show you the Diamondbacks, Suns and Coyotes. Is Philadelphia your home? You can watch the Phillies, Sixers, and Flyers on Comcast SportsNet Philadelphia.
It’ll cost you, though. The average RSN rakes in between $2 and $3 per subscriber per month, and some of the larger networks can pull in a monthly subscriber fee of $3.95. The rising costs of RSNs prompted Verizon to tack on a $2.42-per-month RSN surcharge to its FiOS TV service.
RSNs are also the reason your local team’s games are blacked out on pro sports leagues’ online services, such as MLB.tv, NBA League Pass, NHL Gamecenter, and MLS Live. Fox Sports Detroit, for example, can legally block you from watching the Detroit Tigers on MLB.tv if you live in Michigan. Contracts like this keep sports fans tied to cable and satellite TV, unless they can afford season tickets.
As a result, RSNs bring in huge amounts of revenue, as this chart from PaidContent.org shows:
A good chunk of this money then goes to the sports teams whose games are shown on these channels. Some of those deals are quite large:
- YES Network will pay the New York Yankees $85 million this season. That fee will increase 5% every season between now and 2042.
- The Los Angeles Dodgers struck a 25-year, $7 billion dollar deal with Time Warner Cable to show Dodgers games on SportsNet LA, a brand new RSN that will be launched next year. That averages out to $280 million per year — more than the national TV contracts for the NHL and MLS combined.
- TWC also struck a 20-year, $3 billion deal with the Los Angeles Lakers to air games on the new Time Warner Cable Sports channel, which is currently commanding up to $3.95/month from L.A.-area TV service providers. That’s $150 million per year on top of the $32 million per year that the Lakers currently receive from the NBA’s national TV deals. (That same network will pay the L.A. Galaxy $5.5 million per year for the next ten years. The MLS salary cap this season is $3.1 million.)
- The Chicago Cubs and White Sox receive $450,000 per game from Comcast SportsNet Chicago, which is 40% owned by White Sox owner Jerry Reinsdorf.
- The Boston Celtics’ deal with Comcast Sports New England pays that team an estimated $35-$40 million per year.
You can see all the MLB teams’ deals with RSNs here. Those deals are the main reason baseball salaries have skyrocketed in recent years. The Dodgers’ entire payroll, currently $220 million, will eventually be paid for in its entirety by the SportsNet LA deal — so long as fans in L.A. keep their cable subscriptions, of course. If they want to watch the Dodgers play, it’s either that or season tickets, which start at $375.
At what point do these RSN fees become unsustainable? When do non-sports fans finally decide that they don’t want to foot these bills anymore and cancel their cable accounts in favor of alternatives? Perhaps this is an unspoken reason behind News Corp. president and COO Chase Carey’s harsh reaction to Aereo. Fox Sports is heavily involved in the RSN game, which collects plenty of money from non-sports fans who subscribe to cable. Any alternative TV service could reduce that cash flow, and that could be a huge blow to the RSN business model. But that’s a topic for another day…