Disney ended up with the RSNs as a result of the 21st Century Fox deal, only to divest them to a group led by Sinclair Broadcast Group. YES, meanwhile, has been acquired by a consortium involving the New York Yankees, Amazon and Sinclair.
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The networks’ signals went dark at noon ET after the sides could not reach a deal. They had agreed to a temporary extension earlier in the week.
The dispute comes as AT&T is embroiled in disputes with CBS and Nexstar. Charter Communications faces a major deadline with Disney-owned networks next week. Sports remains a key asset in the rapidly re-bundling TV ecosystem. In the traditional landscape, regional sports could more easily anchor entire networks and present a clear value proposition to customers. In the current environment, with games streaming on YouTube and Facebook and “skinny bundle” and targeted services cropping up, RSNs in LA, Houston and elsewhere have had major struggles.
“The regional sports TV business model is broken,” said Dish SVP of programming Andy LeCuyer said in a statement. “It relies on the majority of customers subsidizing the slim minority who actually watch these channels. RSNs should be like a ticket to the ballpark – fans who want to watch the game should be the ones who pay for it.”
In a statement on the RSNs’ websites, the networks said they “offered to extend Dish and Sling under the current terms of our existing agreement, but Dish and Sling rejected our offer. We know fans are looking forward to the broadcasts during the stretch run of baseball season, and we hope Dish and Sling act to return this programming to their customers.”
According to Dish, the RSNs are seeking payment from “almost all” Dish customers in their regions, even those who opt out of sports packages.
“Sports programming is the most expensive content on TV. Networks pay the sports teams huge amounts of money, then try to recoup it from a broad base of consumers,” LeCuyer said. “It’s time to change the status quo.”
The Yankees, who pioneered the RSN concept 20 years ago, are enjoying a winning season and drawing big ratings on YES. The network also carries the Brooklyn Nets of the NBA, which just signed marquee free agents Kyrie Irving and Kevin Durant and are coming off a playoff season.