In local sports television, what’s old is new again.
(Bloomberg) — In local sports television, what’s old is new again.
On Friday, the Phoenix Suns and Mercury basketball teams announced a new broadcast deal with Gray Television Inc., which owns over-the-air TV stations. That means fans who don’t get cable will be able to see all the teams’ local broadcasts for free with an antenna.
Years ago, sports fans watched games on free broadcast stations affiliated with networks like NBC, CBS and ABC. In recent years, as cable-TV grew in popularity, those games migrated to regional sports channels, which were flush from cash from their distributors and paid large sums for the rights.
Now, the rise of cord-cutting has caused those cable channels to reach fewer people, and teams and leagues are seeking alternatives. The big question is whether teams can generate as much money from free TV stations as they have from cable channels. A combination of new streaming subscriptions and more advertising dollars by reaching more fans could bring in more revenue over time. But falling short of their previous local TV revenue could affect a team’s payroll, including being able to afford players’ contracts.
Starting in the next season games will available in about 2.8 million households in Arizona, more than tripling the number of homes the teams currently reach, the teams said in a statement. The Suns’ new TV deal spans up to five years, while the Mercury’s agreement is two years. The teams will also develop a streaming service with Kiswe, an interactive video company. The terms of the deal were not disclosed.
Both the Suns and Mercury are of high interest to TV viewers. The Suns are currently making a run in the NBA playoffs, while the Mercury are expecting Brittney Griner, who was recently freed from imprisonment in Russia, to play for the team when the season begins in May.
“By going entirely over the air and building our own [direct-to-consumer] product, the Suns and Mercury will now be accessible to millions more fans in Arizona and globally,” Mat Ishbia, governor of the teams, said in the statement.
Last week, the WNBA announced a deal to air regular season games on Friday nights on the ION network, owned by Cincinnati-based E.W. Scripps Co. In another example, the NBA’s LA Clippers broadcast some of their games this season on KTLA 5, a free broadcast station owned by Nexstar Media Group Inc.
A broadcaster that reaches more TV homes can benefit sports teams in several ways, said Karen Brodkin, an executive vice president with the talent agency and media firm Endeavor Group Holdings Inc. She helped broker the Suns deal with her associate, Hillary Mandel.
“It’s very important for sponsorships and advertising sales and all the revenue streams around a team,” Brodkin said.
Sports leagues and teams are also seeking new TV broadcasters because they’re concerned about continuing to get paid by their current media partners. The Phoenix teams’ games had aired on Bally Sports Arizona, a local cable channel owned by Diamond Sports. In March, Diamond, the largest US owner of local sports channels, filed for bankruptcy.
In a statement, a spokesperson for Diamond Sports Group said the Phoenix Suns had “breached our contract and violated bankruptcy law, and Diamond Sports Group will pursue all remedies against any parties that attempt to exercise control over our property interests while we reorganize. This is an improper effort by the Suns to change their broadcasting partner without permitting Diamond to exercise our contractual rights.”
(Updates with comment from Endeavor executive starting in ninth paragraph. A previous version of this story corrected the spelling of the city in the headline.)
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