Inside the NHL
A column last week about the Kraken’s local television ratings prompted a gripe session from cable TV “cord cutters” about perceived evils of regional sports networks.
It’s nothing new. After years of writing about sports TV, I’ve gotten used to topics being commandeered by those eschewing cable for online streaming services but still expecting to watch the Kraken or Mariners for half the cost. They’ll refuse to get ROOT Sports, or claim it’s impossible to view that regional sports network (RSN) in their part of the state. Also, they’ll refuse to use the FuboTV streaming service carrying ROOT, claiming it costs too much.
“Without access to ROOT, you can’t watch Kraken games,” one reader wrote. “Like many, I cut the cable. The streaming option for ROOT is far inferior to other streaming options, and would be an added, not insignificant, expense.”
Another chimed in: “I would LOVE to watch Kraken games from my home … but I don’t. I cut Comcast a while ago and will not pay for fubo.”
And yet another said that “anywhere east of the mountains, Spectrum refuses to pay for the enhanced ROOT package, so they black out the Kraken games and only show the Blazers.”
None of this had anything to do with a Kraken column about why their yearly Seattle-Tacoma market ratings were flat despite an improved team. The column was about hockey viewing — or non-viewing — of subscribers paying for ROOT, not those refusing to pay. And last I checked, Eastern Washington is not part of Seattle or Tacoma.
But I’ll tackle this different topic anyway.
The current RSN situation nationwide is complex, but understanding it requires sports fans to grasp a fundamental truth: Their cable TV viewing was subsidized for years by people with no interest in sports.
Cable packages with ESPN, or any RSN such as ROOT, add $3-$6 apiece to monthly cable bills. That frustrated an overwhelming majority of cable viewers who didn’t watch sports and subscribed only for other channels.
Those viewers are increasingly abandoning cable TV for pared-down streaming options tailored to them for less money.
Some sports fans tried the same strategy, figuring they’d dump cable, jettison some other shows and keep watching sports while saving huge.
But reality intruded. Most TV shows are prerecorded in on-demand format. Live sports are a different, highly valued commodity for advertisers, because viewers typically don’t record games and skip commercials.
So live sports cost more, especially on a local level. Rights fees teams charge an RSN to broadcast games keep rising to support higher player salaries. The RSN recoups that by charging cable distributors a licensing amount to carry their channel in as many places as possible.
If cut-rate streaming services want ROOT, or any RSN, they must pay just like those cable distributors. If distributors see ROOT undercutting them through cheap streaming deals, they’ll drop ROOT.
And once streaming services include an RSN, their monthly rates rise.
Hulu and YouTube declined to pay for ROOT to keep rates cheaper. FuboTV paid for ROOT, and rates increased. I’ve heard from happy fubo customers now watching Kraken games. And those upset at not saving much more by dropping cable.
Those Eastern Washington cable viewers with Spectrum? Yes they get only Mariners games on ROOT, as Spectrum declined to pay extra for hockey.
I’m told ongoing negotiations between Spectrum and ROOT might yet get Kraken games aired. For now, Spectrum viewers wanting Kraken games can switch to DirecTV — a part-owner of ROOT and mostly available statewide.
Or, pay to stream ROOT through DirecTV Stream or fubo.
“In many respects, they hold the keys to their own jail cell,” a high-level source within the cable industry told me of viewers claiming they are trapped without Kraken access. “But they won’t pay for it.”
Interestingly, cable TV bundling might still be the best all-around value for die-hard sports fans.
But nobody in the industry feels that’s a solution. Most expect the current RSN model to be nonexistent within a decade, given how cord-cutters increasingly no longer subsidize sports fans’ viewing habits.
Problem is, there’s no long-term answer yet — though some such as Los Angeles Clippers owner Steve Ballmer have spent years trying.
Remember, the “regional” part of RSN means it’s about local broadcasts. This isn’t the behemoth NFL making a league-level decision to show games only on “free” national channels CBS, NBC and Fox. The NFL is unique, with size and power to do this for massive financial amounts.
MLB, NBA and the NHL can’t replicate that, and their teams rely heavily on local RSN revenue. The Kraken reportedly earn $15 million to $30 million annually from ROOT. Player payroll is $80 million. So viewers demanding the Kraken drop ROOT to make watching cheaper should also suggest ways to offset that revenue. Good luck.
Some want ROOT to produce a stand-alone streaming application. But streaming a lone sports channel without it being subsidized by non-fans would cost far more than many realize.
The Bally Sports RSN chain recently launched a stand-alone app for $20 a month, but in limited markets after sports leagues warned they lacked streaming rights to most games because of preexisting RSN deals. Bally is also reportedly preparing for bankruptcy with the streaming app an expected casualty.
NESN last June began a $30 monthly streaming app for Boston-area teams. ROOT has been in talks about a streaming app in the $20 monthly range, but there are doubts about how many sports fans would pay that much. And if too many did pay, it might undercut cable TV deals with distributors that remain the lifeblood of ROOT’s operations.
The cable TV source said there’s industry hope that behemoth streaming companies such as Amazon and HBO jump into local sports. That with their much bigger scale, Amazon and the like could use current RSN viewers to expand overall national audiences regardless of whether it pencils out on a local broadcast level.
“For now, you’ve seen them dip their toe in the water on a national level for sports,” the source said. “What’s really needed is for them to take the plunge.”
And viewers still wanting local sports short-term might also need to take a fuller plunge — wallets in tow. We’ve become conditioned to think seeing every game involving local teams is some kind of birthright, despite not being far removed from when one weekly “free” TV contest was the norm.
Pay TV changed that. But the “pay” part remains. Somebody was always paying for the indulgences of sports fans. The uncomfortable truth now is, that burden is falling increasingly on fans themselves.