Bally's is a confusing brand.
In 1986, the MGM Grand in Las Vegas, which had been partially destroyed by a deadly 1980 fire, was bought by Bally Manufacturing, and renamed Bally's. It eventually became a Caesars property in 2005, but retained the Bally's name. In mid-December 2022, it was renamed to Horseshoe, but the outside sign was not changed until just last week.
But this thread isn't about that hotel. Nor is it about Bally's Corporation, which owns 15 casinos, including the Tropicana in Las Vegas, which may in turn be renamed Bally's at some point.
Instead, I am talking about Bally Sports, which runs regional sports network. It uses the same Bally logo that has existed since long before I was born, but it is not affiliated with Bally's Corporation, Bally Manufacturing, or any other Bally's entity. The Bally name and logo were acquired via a licensing agreement.
Bally Sports was originally Prime Sports, and you may have seen a local "Prime Ticket" channel on your cable lineup in the 1990s. Eventually this became "Fox Sports Net" in the late '90s, and you would find your local MLB or NBA teams playing there. However, when Disney acquired 21st Century Fox in 2019, the DOJ ordered them to divest either ESPN or the Fox Sports Net channels they were about to acquire, in order to avoid antitrust issues. Disney kept ESPN and sold Fox Sports Net to a company called Sinclair Broadcast Group in May 2019, for $10.4 billion.
In late 2020, all of the channels were renamed Bally Sports, after a licensing agreement with Bally's Corporation was struck. This wasn't just in name only. Bally's Corporation would air some of its content on the networks, and there would be an effort to integrate some of Bally's sportsbetting offerings into the network, as well. The naming rights were sold, not purchased. That is, Bally's Corporation paid Sinclair to have its name on the networks.
Unfortunately, this is a very bad time to own a regional sports network. This is because the regional sports model is antiquated. It relies upon cable TV subscribers (which are decreasing in number every year), and also relies upon cable companies agreeing to pay an increasing amount of money per subscriber. Some cable companies and satellite providers have balked at the proliferation of all of these channels sticking their hands out for $1-$5 per subscriber, and the number of subscribers keeps plummeting. It's also very much stuck in the past. Streaming content is not allowed, so the only way to watch these sports networks is via your cable TV. You cannot stream it on your phone or tablet.
For this reason, the ratings are rather poor for these networks, and advertisers simply don't want to pay very much. It's not like the old days when every dude watched his local sports team on TV each day. There are so many home entertainment options that watching regular season sports has become a pastime only for the diehard fan.
At the same time, it costs a fortune to get the rights to air these games. The Dodgers acquired a whopping $8.35 billion deal for the rights to air their games for the next 25 years -- again with the antiquated cable-only model. This is the main reason they have so much money to spend on players (and why it's frustrating fans that they're being fairly frugal in 2023!)
These regional networks lose a fortune. They simply cannot get the advertising revenue to cover the high dollar contracts with the MLB and NBA teams (for example, Spectrum pays the Dodgers approximately $2 million per aired game), and the network's other shows get virtually zero audience.
I have opined for a long time that MLB has a huge problem which will come to roost soon enough. It's three-pronged, though all are related:
1) The average fan is too old. When my generation croaks, they're going to have a huge problem attracting a large fanbase. (Poker will have this problem, too.)
2) Their cable-only broadcasting strategy is stuck in the dark ages. This further shuts out the younger fans. Laughably, while there's an MLB package where you can watch games on the app, it specifically blacks out the local team!
3) The money will from these regional sports networks will dry up, either when the contracts expire or when the networks themselves go bankrupt. This will create a huge ripple in the MLB salary structure, as most of the money paying for these players is coming from these monster TV contracts.
Well, #3 has just happened.
Bally Sports is broke. They missed their $140 million interest payment, and are discussing declaring bankruptcy. It is likely that the MLB teams expecting payments from Bally Sports will not be getting that money.
This affects 14 of the 30 MLB teams: Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Indians, Detroit Tigers, Kansas City Royals, Anaheim "Los Angeles" Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, San Diego Padres, St. Louis Cardinals, Texas Rangers and Tampa Bay Rays.
Additionally, AT&T Sportsnet, which airs games for the Colorado Rockies, Houston Astros and Pittsburgh Pirates, is also struggling and missed recent payments.
This means that 17 of the 30 MLB teams may have no TV home in 2023, and more importantly, no revenue from those lucrative TV contracts.
In the meantime, MLB Commissioner Rob Manfred said that MLB will take on the responsibility to broadcast these games, and perhaps will start selling streaming packages to local fans -- something prohibited before by these cable agreements.
However, that's just a band-aid fix. MLB has long subsisted on smoke-and-mirrors money from these cable deals, where each team was getting far too much money for selling their broadcasting rights. Those days appear to be over -- and right after an offseason filled with record contracts.
I do not believe local streaming sales will generate anywhere near the money these cable deals were.
It's very possible that these 17 teams will be fucked going forward.
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Originally Posted by ftpjesus
