In the ever-evolving world of sports business and media, few topics spark more intrigue than the future of regional sports networks (RSNs) and the rise of direct-to-consumer streaming. David Preschlack, CEO of Main Street Sports Group, the parent company of FanDuel Sports Networks, sat down with CNBC Media & Sports Reporter Alex Sherman on the CNBC Sport videocast to discuss the transformation of Diamond Sports Group and its path forward as a rebranded company.
During their conversation, the pair tackled everything from pricing strategies to partnerships, giving a behind-the-scenes look at the challenges and opportunities shaping the industry. Preschlack shared insights on the evolving economics of streaming, innovative pricing models, and the potential for a more engaging future for sports fans everywhere.
Here’s everything you need to know about Preschlack’s discussion with CNBC Sport.
FanDuel Sports Networks RSN Channel to Go Live on Prime Video in February
Preschlack gave an update on when Prime Video subscribers can add FanDuel Sports Network RSN channels to their subscriptions. In-market Prime Video members are just a tap away from watching live games and content featuring their favorite MLB, NBA, or NHL team. Preschlack says that the company “thinks that it will be by far the most efficient way to acquire subscribers on a direct basis.”
An exact launch date in the Prime Video store was not given, but Preschlack says that it will be coming “next month in a few weeks.”
The Future RSNs & Possible Partnerships
Across the NBA, MLB, and NHL, 29 teams play on FanDuel Sports Networks RSN after adding the Cincinnati Reds earlier this week. Main Street Sports Group currently operates 16 networks nationwide and sees expansion into additional markets as a step forward. Expanding into more markets not only boosts advertising revenue but also increases value for both distributors and fans.
As the company has to serve a diverse makeup of subscribers throughout the country, Preschlak says that about 26 million subscribers are part of the multi-channel bundle and there are 20 million people that have access to FanDuel Sports Network product directly.
“We think we’ve built the most valuable economic engine for these teams,” Preschlack said. He signaled that they are “open for business” when it comes to conversations with other teams or RSNs interested in joining forces. While examining the RSN market, Preschlack highlighted that he thinks that the “best model includes aggregation” instead of the current model that many fans and NBA commissioner Adam Silver have called “broken,” in the past.
Year-Round Engagement: The Key to Fan Loyalty
One of the more forward-looking ideas Preschlack shared revolved around creating a 12-month destination for regional sports fans. “Having a year-round presence is just logically more valuable than being a six-month destination,” he noted, pointing out the untapped potential of keeping fans engaged even during the off-season.
By maintaining a continuous connection with fans, regional sports networks can build a sense of brand loyalty and expand their audience base. Offering exciting content that extends beyond live games, such as behind-the-scenes footage, athlete interviews, and fan-driven experiences could shift from a transactional model to a relational one, marking a significant evolution in how sports content is delivered and consumed.
The addition of offseason content could prove to be a pivotal way for fans to not unsubscribe from FanDuel Sports Networks. Recently, the Atlanta Braves made Gray Media their exclusive home for 10 Spring Training games, which are games fans can watch for free OTA instead of on FanDuel Sports Network Southeast. Preschlack acknowledged that “in the end, teams own these rights,” influencing what FanDuel Sports Network can do, such as simulcasting.
Can Streaming Prices Drop: Unlocking Accessibility Through Flexible Pricing
As sports fans grapple with the rising cost of streaming services, Sherman didn’t shy away from addressing one of the most pressing questions for sports fans: Is streaming just too expensive? Preschlack emphasized the importance of meeting customers where they are with pricing flexibility.
Comparing the $30 monthly price tag for some sports streaming packages to the far cheaper cost of a Netflix subscription, Sherman asked Preschlack whether pricing was simply out of sync with consumer expectations. He highlighted that FanDuel Sports Network’s DTC product is priced at $19.99 per month, which includes over 300 games in some markets.
After rebranding its RSNs from Bally Sports to FanDuel, Preschlack explains that his company uses that partnership for promotional offerings, including three months of free subscription for placing a bet with FanDuel Sportsbook.
“We have the ability to go lower, and we’re going to test different price points,” Preschlack explained, adding that geography also plays a role in determining pricing strategies. For instance, fans living in the heart of a city might have different needs and viewing habits than those in rural regions or the outskirts of a network’s service area. With the capability to experiment with pricing and tailor it to specific markets, Main Street Sports Group can leverage its data to customize its offerings.
Preschlack mentioned that his company has looked at various variables for the future, including subscriber churn while managing its finances since emerging from bankruptcy. “We have 85% of our distribution revenue locked up for the next three baseball seasons,” he explained. “We have some markets that have 100% of their distribution revenue locked up for the next three baseball seasons.” This is an anomaly in the RSN business, according to Preschlack.
With an increase in distributors putting RSNs in higher-tier packages, more people are cutting the cord and transitioning to streaming platforms. The media industry is adapting to viewer habits as this happens. DIRECTV STREAM recently launched MySports, a sports-only package featuring over 40 live channels. Preschlack notes that having a direct-to-consumer streaming app will help his company succeed in a changing industry.
“You have a pool of subscribers that don’t subscribe to multi-channel television, and you have to believe over a period of time that we can get high single-digit penetration,” he said.
The rebrand of Diamond Sports Group into Main Street Sports Group was to emphasize the locality of the regional sports network behemoth, due to there being a Main Street in every city. The sports media landscape is in a state of dynamic reinvention and Preschlack’s vision for Main Street Sports Group looks to push forward with innovative pricing experiments, bold expansion plans, and strategic partnerships. If things go as planned, this could lead to more accessibility and an engaging future for regional sports fans.
Credit: CNBC Sport