Friday’s news that Warner Bros. Discovery (WBD) is getting out of the local sports television business will have no impact on the ROOT Sports Northwest network it remains a minority stakeholder in.
That’s the word from Patrick Crumb, the Seattle-based president of AT&T SportsNet, the branded name used by WBD on regional sports network (RSN) channels it operates in Denver, Houston and Pittsburgh and for its minority stake in ROOT Sports NW.
“None of it impacts ROOT Sports Northwest or its teams,” Crumb said in a Friday afternoon phone interview.
ROOT holds the broadcast rights to the Mariners, Kraken and the Portland Trail Blazers. The Mariners have held the majority stake in ROOT since 2013, with AT&T providing the TV infrastructure and negotiating the network’s carriage deals.
Crumb said there are no plans to change that.
“None of that’s really on the table at this point,” Crumb said. “It’s just sort of a steady state in the Northwest. For the Northwest it’s just business as usual.”
That isn’t the case in the other three markets, where WBD has rights deals with seven teams including the MLB Houston Astros, Pittsburgh Pirates and Colorado Rockies, the NHL Pittsburgh Penguins and Vegas Golden Knights and the NBA Utah Jazz and Houston Rockets. WBD and Crumb have spent months in talks with the impacted teams to devise strategies enabling the company to exit the RSN business.
Sports Business Journal reported that WBD sent letters to teams advising them they have until March 31 to reach an agreement to take back their TV rights. If that doesn’t happen, the networks would eventually move forward with a plan to file for a Chapter 7 liquidation filing.
The report also stated that WBD informed the teams they could continue using the same production staff and equipment to produce their games.
The RSN industry has been impacted heavily by the switch of so-called “cord cutters” away from cable TV to online streaming. But many online streaming services refuse to carry RSNs — claiming they cost too much and would force them to raise their cheaper subscription fees that drove cable customers to them in the first place.
RSN companies claim they can’t charge less to streaming services because it would undercut the cable companies also paying to carry their programming. They say live sports are expensive to produce because teams charge tens of millions of dollars annually for rights fees used to cover expenses such as player salaries.
A statement provided to Sports Business Journal by WBD said: “AT&T SportsNet is not immune to the well-known challenges that the entire RSN industry is facing. We will continue to engage in private conversations with our partners as we seek to identify reasonable and constructive solutions.”