The drama and instability surrounding the Main Street Sports Group RSNs may soon be enough for its rights partners.
The NBA, NHL and Major League Baseball teams who have deals with Main Street Sports Group, owner of the FanDuel Sports Network RSNs, are in one form or another preparing to move on from the company, according to a Wednesday night article by Tom Friend of Sports Business Journal. Friend cited sources as saying that the MLB Cardinals — who did not receive their December rights fee payment from Main Street — have already told the company that they are opting out of their contract, and that at least six of the eight other MLB clubs in business with the company are expected to do the same.
NBA and NHL teams have also begun contingency planning for the possibility that Main Street will be financially unable to produce games for the remainder of those ongoing seasons. Main Street already reportedly missed payments for several NBA teams this month.
Main Street was reported last month to be in talks with the streaming company DAZN about a potential majority stake in the RSN business. But for that deal to go through, per Friend, teams would have to agree to terms that they “appear whole-heartedly against” — specifically the signing away their digital rights as part of media rights extensions that would run through the final year of this decade. In addition, Main Street is said to be asking teams to accept a one-fifth reduction in rights fees and to delay those reduced payments to as late as this summer, a 50-50 profit-sharing agreement that would start next season, and yet more rights fee reductions in the season after that.
Sources told Friend that Main Street is now suggesting to teams that there is “a second potential buyer,” and that it has told MLB teams the interested party is Fubo — the streaming MVPD now majority owned by Disney. But other sources disputed that “strongly.”
The RSNs once owned by 21st Century Fox and branded under the “Fox Sports” moniker have become a source of almost constant instability for the teams since being sold as part of Disney’s 2017 acquisition of most Fox assets. After Disney was forced to divest the RSNs to win approval for its broader acquisition, they were eventually purchased by Sinclair Broadcasting. After accumulating billions in debt, Sinclair was forced by its creditors to set up an independent board of directors that eventually assumed management of the RSNs, filed for bankruptcy, and spent the better part of two years restructuring the business — all the while dropping rights and even whole networks, leaving some teams in a lurch in the middle of their seasons.
The instability seemed to have ended when Main Street emerged from bankruptcy at the start of last year, giving some hope that the RSN industry would be on solid ground long enough for teams to set up a clean, collective exit in the next two or three years. Instead, the end may be as calamitous as was feared during the bankruptcy process.
