Back in February, Warner Bros. Discovery told its professional sports team partners that it wanted to divest the three AT&T SportsNet regional sports networks it reluctantly inherited amid the merger of WarnerMedia and Discovery.
Seven months later, a clearer exit strategy has emerged, as outlined by Sports Business Journal's John Ourand.
WBD has agreed to sell AT&T SportsNet Pittsburgh to Fenway Sports Group, which owns one of the channel’s anchor tenants, the NHL’s Pittsburgh Penguins.
WBD is also in talks to sell AT&T SportsNet Houston to that channel’s foundational teams, the NBA's Houston Rockets and Major League Baseball's Houston Astros.
AT&T SportsNet Rocky Mountain, which recently saw the NBA’s Utah Jazz and NHL’s Vegas Golden Knights depart to local-station broadcast TV deals, will shutter.
WBD will, however, retain a sliver of skin in the fast-declining RSN business, serving as 29% owner of Seattle’s Root Sports Network, with that channel’s principal team, baseball’s Seattle Mariners, being the majority owner.
The moves clarify WBD's exit from the RSN business, but plenty of questions remain for the numerous individual teams involved.
Fenway Sports Group, for example, operates one of the more profitable RSNs still around, New England Sports Network (NESN). And SBJ says it's likely that SportsNet Pittsburgh will launch a direct-to-consumer streaming service around the Penguins, much as NESN has around its tenants, the MLB's Boston Red Sox and NHL's Boston Bruins.
We could be witnessing the emergence of a powerful go-to sports streaming technology shop in regard to the Ted Leonis-backed ViewLift, which last week announced that it will be handling the tech for the Vegas Golden Knights’ new DTC venture. It was also reported at the time that ViewLoft would likely take on the Penguins’ DTC effort, as well.
Meanwhile, two MLB teams under the AT&T SportsNet umbrella, the Pittsburgh Pirates and Colorado Rockies, will be searching for new RSN homes once baseball's regular season ends next month.
The Pirates have the option of cutting a deal with Fenway, or the team could follow the path carved out by MLB rivals the San Diego Padres and Arizona Diamondbacks, which were both abandoned by Bally Sports operator Diamond Sports Group when the subsidiary went into Chapter 11 restructuring earlier this year.
Both the Padres and the Diamondbacks chose to let Major League Baseball set them up with pay TV production and distribution for new channels operated by the league itself. SBJ said these channels pay the teams revenue adding up to about 80% of what they were getting with their old Bally Sports contracts.
The Rockies have the same MLB option, but the team reportedly can also choose to move over to the Stan Kroenke-backed Altitude Sports, home of the NBA defending champion Denver Nuggets and NHL's Colorado Avalanche.
The Rockies are viewed by some as a critical addition that might convince Comcast to finally reintegrate the Altitude RSN back into its program guide after dumping the channel four years ago.
