-
Tim Bontemps, ESPN
In just about every way, Ryan Smith is the antithesis of the typical NBA owner.
He frequently sports a backward baseball cap, including in a recent Zoom interview with ESPN. At 45, he’s young enough to still get on the court and play basketball, as he did in a shooting contest with Utah Jazz coach Will Hardy last week.
And he’s the rare person who grew up rooting for a team as a child and then went on to have the business success that allowed him to purchase that same team as an adult, as both he and NBA commissioner Adam Silver have pointed out.
All of that, Smith says, helped him decide that the best thing for his franchise moving forward was to bring Jazz games back to over-the-air broadcasts on local channel KJZZ, in addition to a subscription service to stream the games, beginning with the 2023-24 season.
“I was a fan,” Smith told ESPN from his office overlooking the courts inside the team’s Salt Lake City practice facility last week. “Like, I know the problem [of] going, ‘Why is my game blacked out? Why am I dealing with this? Why can’t I get my game? I’m on the road traveling somewhere. Why is this so complex? Where’s my streaming option? Is it League Pass?’
“To be honest, it was just a ton of friction. And second, I believe that the RSNs, and the local cable, there’s going to be a lot of movement in that area, and I personally don’t think the Jazz need to be part of that roller coaster.”
In the wake of AT&T SportsNet getting out of the regional sports network business earlier this year, the franchise unveiled its plan Wednesday morning for broadcasting its games on a combination of over-the-air broadcast of all games on KJZZ and a newly created streaming service called Jazz+, giving the team total control over its local broadcast rights.
Doing so comes without the hefty revenue payments that come along with an RSN deal, which have come to serve as the backbone of sports teams and leagues for decades. But those are going away as the cable industry continues to reel from years of subscriber base erosion.
The Phoenix Suns have taken a similar step, also shifting their games to local television for this coming season. In both cases, the teams highlighted how much wider their reach will be with every game available to fans over the air instead of through a cable subscription. The Jazz, for example, said they went from a reach of roughly 1.2 million people last season to 3.2 million under the current plan.
Wider reach, though, doesn’t exactly guarantee larger revenues. Going to an over-the-air broadcast model means these teams will not be getting the large checks they have been receiving from RSNs for years now.
The Jazz were reportedly making around $20 million per season from their deal with AT&T. When asked directly on a call with ESPN last week how long it will take — short, medium or long term — to get back to that same level of revenue they enjoyed under the prior deal, Jazz president Jim Olson chose the middle path.
“It’s going to happen in the medium term,” Olson said. “We’re already seeing some results happening where, you know, we’re just starting to take a bite of that apple, but we’re already seeing things that are very promising for where we’re headed. And so, I, I would put it in the medium term [that] we’re going to get back to where we know we need to be.”
A significant part of Utah’s plan to do so is the creation of Jazz+, which officially went on sale Wednesday morning. While fans nationally will still be able to watch via streaming or mobile devices through NBA League Pass, for local fans — those within a 150-mile radius of the Delta Center, which includes parts of Idaho and Wyoming — Jazz+ will serve as their only way to watch a game on a computer, phone or on the go.
Fans will have the option to buy individual games for $5 apiece, pay $15.50 a month for a monthly subscription or purchase a yearly subscription for $125.50, which, if purchased by Oct. 24, will also include a pair of upper bowl tickets to one select Jazz home game.
In addition, the subscription service is going to have behind-the-scenes content, like the shooting contest between Smith and Hardy — the first episode of an ongoing series, “Shoot Your Shot with Coach Hardy.”
Smith joked that despite being a passionate fan of the team, he didn’t realize how much time he and the rest of the team would be spending in the practice facility when he bought the franchise, and how essential a part of the business it was. He hopes their original content will provide that kind of insight for equally passionate fans.
Still, the underlying motive behind Jazz+ is to provide a vehicle for fans who either don’t have a TV or want to watch things on the go or on their electronic devices.
“We’ve done a lot of research on this, and quite frankly, a lot of people actually have even gone away from TVs in their homes and are streaming on iPads or laptops or even on their cellphones,” Olson said. “And, once again, in the effort to get out to everybody, maybe you have a job that takes you away from the home in the evenings, but you have the flexibility of jumping on and watching part of a game, a whole game … it’s really just making sure we’re making our games available no matter who you are, where you are, what your, your situation is. And then adding this other content is just another benefit.”
Teams across the NBA and other sports, including MLB and the NHL, where the RSN model is also prevalent, will be watching intently to see how Utah’s new TV platform progresses, and whether Olson’s belief that a path back to the same revenue in the medium term can come to fruition.
“I think every team is going to have to look at the variables and run through their own kind of formula on, ‘Hey, it’s going to be more work to start, but long term you’re going to have that, that freedom,’ right? That freedom to go and, and build your brand,” said Smith, who, as the founder of Qualtrics, comes from a tech background.
“Margins in the NBA are not huge. This isn’t like the tech company, where you’ve got 40% margins that are just sitting there. We throw everything back in. So, a lot of teams can’t just take that margin hit. What makes Utah different? … Since [the Jazz signed its last deal with AT&T] 10 years ago, the market size has increased so [much] in Utah, being the fastest-growing state and having three cities within 90 miles that are top-three fastest-growing. That adds up. So we looked at it and said, ‘Look, for the money we are making, versus the market size … there’s a dislocation here we can take advantage of.'”
Source: www.espn.com