The regional sports network (RSN) industry is facing a dramatic decline, with Diamond Sports Group’s portfolio of Bally Sports networks losing a staggering amount of value in just six years. According to CNBC analyst Mike Ozanian, the equity valuation of these networks has plummeted from $20 billion in 2018 to a mere $600 million today.
This precipitous drop highlights the severe challenges facing the RSN business model, which relies heavily on cable bundle subscriptions in an era of cord-cutting and streaming dominance.
Here’s a breakdown of the devaluation:
- 2018: Disney acquired the networks as part of its purchase of 21st Century Fox, valuing them at $20 billion.
- 2019: Sinclair Broadcast Group purchased the RSNs from Disney for $10 billion, already a significant reduction in value.
- 2020: The value continued to erode under Sinclair’s ownership, dropping to $5 billion.
- Present: The networks are now estimated to be worth just $600 million, a staggering 97% decline from their 2018 valuation.
This dramatic devaluation reflects the broader struggles of the RSN industry. As more consumers opt for streaming services and à la carte programming options, the traditional cable bundle model, which has been the financial backbone of RSNs, is rapidly losing its relevance.
Diamond Sports Group, a subsidiary of Sinclair, filed for bankruptcy earlier this year, further underscoring the financial turmoil in the RSN sector. Now it has been spun out into its own company separate from Sinclair. The company has been grappling with declining subscriber numbers and rising programming costs, leading to strained relationships with sports leagues and distributors.
The future of RSNs remains uncertain. Some analysts predict further consolidation and restructuring, while others believe that streaming platforms and alternative distribution models will ultimately replace the traditional RSN model.
This dramatic decline in value serves as a stark reminder of the challenges facing the television industry as it navigates a rapidly changing media landscape.