WBD Sports closer to exit from nearly all of its RSN business

May 28, 2024

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Warner Bros. Discovery Sports is a little more than a month away from unwinding almost all of its regional sports network business.

When the current baseball season ends, WBD Sports is set to sell its RSNs in Pittsburgh and Houston to some of the teams in those markets and all signs point to the shuttering of its Denver-based channel, AT&T SportsNet Rocky Mountain.

Soon after the Oct. 1 conclusion of the MLB season, WBD Sports’ only RSN asset will be a 29% stake in the Seattle-based Root Sports Northwest. The Seattle Mariners have been the majority owner of that RSN since 2013.

WBD Sports already has agreed to a deal to allow Fenway Sports Group, which owns the Pittsburgh Penguins, to take over AT&T SportNet Pittsburgh. Specific financial details about the deal are not known, but it is expected to close within the next several weeks.

Fenway Sports Group has a lot of experience in the RSN business, as it co-owns one of the country’s most successful regional sports networks in NESN. The deal to take over the RSN ensures that the Penguins will remain on linear television in the Pittsburgh market.

It’s likely that Fenway Sports will launch a direct-to-consumer service around the Penguins, especially considering that NESN launched one around the Red Sox last year. But nobody is prepared to offer specifics about how a Fenway Sports-owned RSN will look in Pittsburgh.

A deal for the Houston RSN, AT&T SportsNet Southwest, will take a little longer. WBD Sports is still negotiating to have the Astros and Rockets take over that network. Several sources describe the two sides as close to a deal and expect one to be finalized before the start of the NBA season. The Rockets open the NBA schedule Oct. 25 in Orlando.

The biggest question that remains is what happens with the rights to two of the affected MLB teams: the Pirates and the Rockies.

Both teams have options. They could send their rights to MLB, which would then handle the production, find the cable and satellite distribution, and pay the team around 80% of its current rights fee.

That’s what has happened in San Diego and Phoenix this season after the bankrupt Diamond Sports Group stopped paying the rights to the Padres and Diamondbacks.

In Pittsburgh, the Pirates still are considering cutting a deal with Fenway Sports Group to remain on a Pittsburgh-based RSN with the Penguins. Sources say the team is more likely to send its rights to MLB, but that decision still hasn’t been made.

Neither the team nor MLB feel that they are under any kind of deadline pressure to get a deal done, since it will not affect the Pirates’ current season.

The Rockies’ situation in Denver is a little more muddled. Like the Pirates, the Rockies could allow MLB to control its rights. But sources said the team also is considering joining another RSN that operates in the market.

Sources said that Altitude has approached the Rockies in the hopes of having a three-team RSN with the Nuggets, Avalanche and Rockies.

Altitude is hoping that a deal with the Rockies — and its 162-game season during the summer — will help it resolve its dispute with Comcast, which owns the market’s dominant cable system in Xfinity. Comcast has not carried Altitude since September 2019, and no agreement appears to be on the horizon.

None of these moves should come as a surprise. Back in February, WBD Sports told teams that it was getting out of the RSN business. The teams would have to either take their rights back or face the prospect that the RSNs in Denver, Houston and Pittsburgh would make a Chapter 7 liquidation filing.

WBD Sports eventually said that WBD agreed to produce and distribute games — and pay rights fees — through the MLB season.

WBD Sports executives, like Chairman and CEO Luis Silberwasser and AT&T Sports Networks President Patrick Crumb, worked closely with the leagues and teams to reach these wind-down agreements to make sure that there was no disruption in service.

League sources contrasted WBD’s collaborative approach with their relationship with Diamond Sports Group as they have dealt with bankruptcy.

While the leagues still are dealing with some unknowns, particularly with the Pirates and Rockies, they have praised WBD Sports’ transparency during this process.

John Ourand can be reached at [email protected]. Follow him on Twitter @Ourand_SBJ and read his weekly newsletter and listen to his weekly podcast.

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