We already knew that the regional sports network business wasn’t exactly in great shape, but sometimes it is hard to quantify just how much it has fallen.
However, CNBC senior sports reporter Mike Ozanian offered some figures on social media Thursday that showed the situation around the regional sports network business may be even more dire than one could imagine.
Ozanian outlines that since Disney’s purchase of the Fox Sports RSNs in 2018, which valued the networks at a price of $20 billion, that same set of networks are now valued at $600 million. That’s a 97% reduction in valuation in just six years. It’s hard to think of any asset outside of niche cryptocurrencies that can lose that much of its value in such a short period.
It should be noted, as smartly pointed out by former Fox Sports executive Bob Thompson in response to Ozanian’s social media post, the original $20 billion valuation likely included Fox’s stake in YES Network that Disney held onto while divesting the remaining RSNs.
Of course, these are the same set of networks that have spent the past year-plus in bankruptcy proceedings, but it goes to show just how much the value of live local sports have declined. Once a cash cow in the age of peak cable TV, able to command some of the highest carriage fees in the bundle, RSNs have fallen victim to cord-cutting at a faster rate than most other linear television properties.
The instability has led some teams to seek distribution elsewhere. A number of NBA and NHL franchises have transitioned to a combination of over-the-air broadcast and digital streaming to air games. Major League Baseball has cut ties almost entirely with the Diamond Sports Group networks currently seeking bankruptcy relief and instead will produce and distribute several franchise’s local rights in-house. Others may renegotiate with Diamond, but for those networks losing a MLB franchise, summer programming will become quite challenging.
Nevertheless, the sale continues to prove a shrewd business decision from Fox. The network sold a declining asset at or near the top. But even the most prescient media analyst couldn’t have predicted in 2018 that the RSN business would decline this quickly.
[X/@MikeOzanian]
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