Executives from Scripps Sports, Gray Media, Sinclair and Fox Television Stations say the flurry of sports rights deals they’ve struck have seen big wins in viewership, though monetization has been slower to follow. (Ian Maule/AP)
LAS VEGAS — While local broadcasters enjoyed a strong 2024 driven by record political advertising, the call-letter station market continues to be challenged by increased competition from streaming players for viewers and advertising dollars, as well as by rising reverse-compensation payments to networks. However, a growth opportunity has emerged in the form of major league sports rights returning to local stations.
After a shakeup of the regional sports network business driven partly by the COVID pandemic, station groups have stepped into the void. Over the past two years they’ve scooped up rights to professional basketball, hockey and baseball teams in their local markets, sometimes creating new 24/7, regional over-the-air networks in the process. Key players in the local sports game who gathered at TVNewsCheck’s Programming Everywhere conference last week during the NAB Show said those bets were already paying off for both stations and teams. And they predicted more local rights deals to come.
The ‘Second Inning’
Scripps was an early mover, inking a deal back in 2023 with the NHL’s Vegas Golden Knights to carry all non-nationally exclusive games on its Las Vegas station. It followed that with a national agreement to carry the WNBA on its Ion broadcast network and more local NHL deals with the Florida Panthers and Utah Hockey Club. But Scripps Sports President Brian Lawlor, speaking on the panel “(Re) Building a Sports Business on Local Broadcast” moderated by this reporter, declared that it was only the “second inning” in the overall trajectory of major league sports rights returning to local broadcast.
“I still think it’s really early,” Lawlor said. “A lot of the teams that have been with RSNs for decades are sort of looking at the landscape, trying to figure out is over-the-air a good platform for them? The reach is good. The money depends, since it’s more of an ad-based model versus a distribution model.
“Also, I think we’re in the really early stages with the distributors trying to get them to understand our new business model and that broadcasters are going to be part of sports rights moving forward,” he added. “But I think they’re still fighting that and getting their heads around that.”
Gray Media President/ Co-CEO Pat LaPlatney, whose group has deals with multiple MLB and NBA teams including the Atlanta Braves and Phoenix Suns, said that it was perhaps “top of the third” inning but that there was still a long way to go for the new local sports model that combines linear over-the-air broadcast with direct-to-consumer (DTC) streaming.
“There are a number of deals out there that are sort of bigger, broader deals that haven’t happened yet,” LaPlatney said. “But I do think that this broadcast/DTC construct that’s emerging is something that’s sustainable.”
Eyeballs Outpacing Monetization
Sinclair EVP of Corporate Development Scott Shapiro, who previously helped run the Bally RSNs (now FanDuel Sports Network) as COO-CFO of Diamond Sports, agreed with Lawlor and LaPlatney’s assessment. He said that while the reach of broadcast is larger, the “eyeballs are definitely ahead of monetization.”
He said there is also a “wide disparity” in what types of deals teams and leagues are interested in. Sinclair stations in Portland, Ore., and Salt Lake City have season-long deals with the Portland Trail Blazers and Utah Jazz, and its Seattle stations just inked rights with the WNBA’s Seattle Storm.
“Even the geographic footprint can be interesting for a broadcaster to put together,” Shapiro said. “Now we’re seeing packages of games come out, which is the new development, and how to clear those in a way that makes economic sense. It’s a lot of potential transactions flying around.”
The Fox-owned stations have picked up some local sports rights themselves, first with a big deal with the NHL’s Anaheim Ducks on KCOP Los Angeles followed by smaller deals with several MLB teams including the Anaheim Angels and Minnesota Twins. Frank Cicha, EVP, programming for Fox Television Stations, noted that many deals were thrown together quickly in the wake of the RSN shakeup in order to secure a broadcast home before teams’ seasons started.
“A lot of these are shorter term,” Cicha said. “We have a lot to learn, not only about what we’re doing right now, but where this is all going to go when these deals come up. Because it’s going to be quick.”
Soaring Ratings, New Advertisers
For teams, the OTA broadcasts reach a much bigger audience than they had with RSNs, helping to drive ticket and merchandise sales as well as overall fan engagement. And for local stations, the live games have yielded a significant ratings improvement over the programming they replaced as well as a strong advertiser response.
Scripps’s OTA broadcasts doubled the rating for Vegas Golden Knights games last year compared to the rating they previously had on an RSN, Lawlor said, with 43 of the top 100-rated shows in Las Vegas last year being Golden Knights games. And ratings for the Florida Panthers are up 130% this year.
“Our thesis is that when you go and put them on over-the-air broadcast, and our stations are fully distributed, that there’s a lot more opportunity for eyeballs,” Lawlor said. “And obviously advertisers are quick to follow. It’s rare that they can find that level of audience. And the fact that people watch sports live, it’s not time-shifted. It’s great call-to-action, weekend sales, things like that. We’ve seen a lot of success.
“And for us, a lot of these dollars, most of them are new dollars,” he continued. “They’re not our regular advertisers. And if they are, they spend in sports at levels completely different than what they do when they’re just sort of putting together flight-based buys. It’s a very different advertiser experience.”
Gray has also enjoyed strong sports ratings, generally growing the audience three to five times compared to the previous time-period performance. The first Atlanta Braves game Gray carried this season was “literally 10 times the time period,” LaPlatney said. He added that sports advertisers are starting to buy into other dayparts including news and syndicated shows.
Both Scripps and Gray have also enjoyed a positive change in viewership. The WNBA games have drawn more younger and male viewers to Ion, which has traditionally has had an older-skewing female-based audience, Lawlor said. Meanwhile, the WNBA games that Gray carries have seen strong growth in male viewers 25-54, LaPlatney said, as more men come to appreciate the WNBA’s high level of play.
Given his experience in RSN ratings, Shapiro said he was “impressed with the younger skew of broadcast” after Sinclair’s two season of NBA games. He said the OTA broadcasts have “spiked the rating younger” with more viewers in the 25-54 demographic, which differs from the over-55 viewers that traditionally watch RSNs. He also sees synergies between sports and Sinclair’s local news product.
“It remains to be seen in the long term how much it drives a news rating increase and news revenue increase,” Shapiro said. “It is definitely one of those halo impacts that’s hard to quantify, but I think very critical to understanding how beneficial professional sports could be for local TV news.”
Emergence Of The BSN
Gray doesn’t just show the Braves games in Atlanta, but across multiple stations in the southeast in what LaPlatney calls a “broadcast sports network,” or BSN. Gray runs 11 BSNs in total across the group, surrounding live major league games with minor league and college sports as well as some archive footage from Raycom Sports.
“It’s not just Atlanta,” LaPlatney said, noting there are 24 markets that carry the Braves games, “and there are real numbers in every market.
“The benefit to the team is not simply in the whole market,” he noted. “It’s this large geography where there’s a whole lot of people watching their product. But in terms of time-period comparison, there’s really no comparison. It’s sports, and sports and news are the only two things people watch live anymore. It’s making a difference.”
Sinclair is pursuing a similar approach with the Portland Trailblazers, showing games across multiple Pacific Northwest markets and also creating a 24/7 network that airs in Portland with a mix of sports and news programming.
IP transmission vendor LTN is helping to support the BSN model by replacing satellite as a way to deliver live programming across multiple stations, and by offering the ability to deliver geographically targeted ads to different zones within the BSN as well as customized graphics. The company also delivers live sports to streaming platforms, a rapidly growing segment, while continuing to work with legacy RSNs.
“On the broadcast side, it’s been a great opportunity for LTN,” said Rick Young, LTN SVP and head of global products. “We’ve worked with some broadcast groups to do live event, live master control services around exactly this model.”
Shapiro said the kind of geographically targeted advertising Sinclair can do with the Portland Trail Blazers’ games is a big improvement from his RSN days.
“We had our network wherever it was, and it wasn’t economically viable to create another zone because we were using satellites, and satellites are very expensive,” Shapiro said.
“When we set up the Portland Trailblazers, now we’re able to use LTN and we have multiple ad zones,” he added. “We have a Seattle ad zone, we run a Southern Oregon ad zone. We have incremental inventory that our local sales forces can sell that aren’t in Portland proper, and it’s completely accretive to us to have new inventory that didn’t exist before.”
Different Streaming Strategies
While they agreed on strong ratings and news synergies, the broadcasters had different points of view on whether streaming deals should be struck along with OTA rights packages. Some are leaving streaming to the teams, while others are partnering on DTC efforts.
After experiencing an eventually unsuccessful effort to launch a comprehensive streaming product at Diamond Sports, Shapiro is taking a different approach with the Sinclair stations. He said Sinclair has listened to teams and “tried to understand what their desires were before we went and did anything from a streaming perspective.” Ideally, he would like to see all the advertising avails in one pool that a single sales force could attack, but that isn’t the current reality.
“Our deals today have been sort of ceding digital to the team, which was an important point for those counterparts,” Shapiro said. “But even in recent conversations, it seems that that’s morphing and maybe the teams are thinking differently about it, too.”
Scripps feels strongly about the combination of linear and streaming and has partnered with both the Golden Knights and the Florida Panthers to create a streaming product that complements its linear assets. It has about 70 games in each market that it produces and broadcasts locally. It then also streams them on a team-branded DTC app that sells for $69.99 per season.
The streaming app allows fans to watch games on a laptop or smartphone when they can’t sit in front of their living room TV, whether they’re on the go or stuck at work. Lawlor said that’s particularly important in a Pacific Time Zone market like Las Vegas, where a Knights road game against an East Coast team might have a 4 p.m. start. The app doesn’t just stream in Las Vegas, but spans a territory that includes Nevada, Arizona, Montana and Idaho.
“It’s a paid app,” he said. “We sell a different ad stream in that versus the linear ad stream, so it’s additional revenue. It’s done incredibly well, with really good engagement. But we think again, our proposition is we want to make games available anywhere, on any platform, on any device in the market, so that your fans get to see your games.”
Gray’s streaming stance is somewhere between that of Sinclair and Scripps, LaPlatney said, although he shared Shapiro’s concern over how ad inventory is managed.
“You really need to work together with the team in terms of how ad sales works, because you don’t want to be stepping on each other if they’re handling streaming and you’re doing broadcast,” LaPlatney said. “We make sure that that’s well-coordinated in any of the streaming deals that we’re involved with.”
Retrans Potential
Of course, if the local sports trend solidifies and stations do more deals they could aim to command higher retransmission-consent fees from cable operators and other MVPDs in the future.
Lawlor noted that since the Scripps stations carrying NHL and WNBA games are some of the most watched in their markets, they certainly have value. And since Scripps is paying a license fee to acquire those rights, it would like to get some compensation for that value like its RSN predecessors did, even if a broadcaster’s business model for sports is focused more on advertising dollars.
“Our models are largely, primarily driven off of advertising models,” Lawlor said. “But that doesn’t mean we go and give away our programming for free. We’re paying a fair amount, and an MVPD would certainly benefit from having these stations knowing the significant viewership that’s happening, and it’s happening live. There’s a fair market value to be negotiated.”
LaPlatney agreed. “If an independent television station shows up with 150 hours of a local NBA team, or 180 or 200 hours of baseball, that’s something that’s worth paying for,” he said. “Because that’s the highest-rated stuff in the market outside of the NFL, right? So that just makes sense to me.”
