The Victory+ streaming service could be a solution to the potential collapse of the Main Street Sports Group RSNs.
Tom Friend of Sports Business Journal reported Wednesday that “multiple” NBA, NHL and Major League Baseball franchises are in “emergency talks” with Victory+ ahead of the potential shuttering of Main Street Sports Group, operator of the FanDuel Sports Network RSNs. Per previous reporting, Main Street has until the end of this month to line up a buyer before the nine MLB franchises with which it is partnered — all of whom opted out of their deals earlier this month — leave for good.
Even outside of that ultimatum, it is widely understood that Main Street will shut down without a buyer. While the company has signaled that it would finish out the current NBA and NHL seasons, teams are said to be skeptical and making contingency plans. Victory+ to this point had not been publicly mentioned as a potential option, but the streamer already has relationships with the NHL Stars and Ducks and MLB Rangers that can serve as a proof-of-concept for any interested franchises.
Friend described a Victory+ “sales pitch” that is flexible enough to account for both short-term and long-term needs, combining “modest” rights fees with minimum guarantees and revenue sharing above a certain level. Teams could theoretically opt for the experience of the Stars and Ducks, whose games are primarily broadcast for free by Victory+, or that of the Rangers — who created their own subscription-based RSN and used Victory+ as one of several distribution options.
The president of Victory+ parent company A Parent Media Co. — Neil Gruninger — told Friend that the company would “absolutely be delighted to take on as many teams as we can to ensure that fans have their games.”
But the key as always is the financial stability of the partner. Teams are owed rights fees by Main Street Sports Group; the issue is that they are not receiving them. If Victory+ were to expand its roster — there are 29 total Main Street teams — could its business model accommodate all of them?
And while any rights fee is presumably better than none at all, how much of a haircut would teams have to take? Gruninger told Friend that rights fees under Victory+ can “over time” return to the status quo that existed before the Main Street RSNs went into bankruptcy four years ago. He also touted the streamer’s ability to go “beyond” the old rights fee numbers, mentioning “additional content” — specifically referencing “YouTubers” according to Friend — and “additional ways of generating revenue that’s beyond even just advertising and sponsorships.”
As has been the case with the ‘beam and stream’ model combining broadcast television exposure with direct-to-subscriber streaming, the Victory+ model is viewed as increasing exposure for teams who have been locked away behind the cable paywall. Friend noted that the Dallas Stars have seen increases in ticket and merchandise sales, and that the Ducks rank sixth in jersey sales despite a sub-.500 record last season. But on-ice results would surely be the main driver; the Ducks are in the playoff picture this year, and the Stars have been a consistent contender throughout the decade.
Though he credited the team’s “television situation” as being part of the reason for its economic growth, Dallas Stars president and CEO Brad Alberts was inconclusive about the impact. “How much of that is because our fans are watching and seeing our promotions on Victory? Who knows,” he told Friend — adding later that the economics are still “TBD. We’re still figuring out what exactly this model can generate and how best to do it.”
