Recently, we have been seeing a lot of blackouts with local ABC, CBS, FOX, and NBC affiliates. Over the summer, DIRECTV saw 200 stations go dark in 116 markets when it had a fight over fees with Nexstar. Now, DIRECTV’s Chief Content Officer Rob Thun is warning that more blackouts are likely coming soon.
These comments were made on Sports Business Journal’s John Ourands podcast, with co-hosted with Andrew Marchand of the New York Post. At issue here is the demand from local TV stations that want more money because sports that had been on RSNs, like Bally Sports, are now moving to local affiliates. Thun warned that in a similar way that we have seen many cable providers drop RSNs over the high costs, we could see locals being dropped for the same reasons.
This all comes as many locals have started to talk about how they plan to demand more money from cable TV providers as they add more live sports that are being dropped by RSNs.
Gray Television, in a presentation to investors earlier this month, said they expect to get even more from cable TV bills going forward. According to the presentation, they are counting on more professional sports moving to local TV stations as RSNs shut down. This, they hope, will allow them to charge cable TV companies even more money for the local ABC, CBS, FOX, and NBC affiliates they own.
Already Scripps, a major owner of local TV stations, has announced that it expects $750 million in retransmision revenue from cable TV, up 15% over last year. The company also said it was able to get a 40% increase in net distribution dollars.
Scripps President and CEO Adam Symson said in a release that he was “pleased” that the company secured the agreements without resorting to blackouts that “punish viewers.” The question now is whether the cable companies will be happy with those deals once they have to pay more for local sports.
Thun also warned about DIRECTV’s limitations when it comes to offering all the new smaller locals broadcasting NBA and NHL games in local markets. “Our mousetrap of satellite was not built to accommodate all the subchannels across the country. We have a tough time delivering all the primary signals across the country, let alone subchannels.”
Already, we have seen a growing number of subchannels being added to streaming services like DIRECTV STREAM to address the need to cover NBA and NHL games that are now on free broadcast TV. It seems that the main DIRECTV service may be at a disadvantage compared to streaming if more smaller local TV stations need to be added.
The future of sports is unknown, but increasingly, local broadcast TV station owners hope it is on local TV. The issue with that is they are hoping that will also result in higher payouts from cable TV companies for their channels. With many major cable TV networks, including Spectrum and DIRECTV, putting their foot down on the high costs, this may lead to more blackouts in the future.