In a move that is perhaps both game-changer and tipping point, the Phoenix Suns and Phoenix Mercury have struck a deal that removes their long-held television rights from cable.
Starting with their next seasons, the teams’ games will be broadcast for free over-the-air and streamed online on a new direct-to-consumer service.
The teams’ contract with Bally Sports Arizona, where their games have been shown on cable since 2003, has expired and will not be renewed. The games instead will be available on local Arizona television stations in Phoenix, Tucson and Yuma and streaming firm Kiswe on a new platform.
The shift could cost the Suns tens of millions in guaranteed money per year in the short term, but it will boost the number of households the games are available in from around 800,000 to more than 2.8 million, according to the team.
“We’re not focusing on money. We’re focusing on winning, success and taking care of fans, taking care of the community,” new team owner Mat Ishbia said. “What happens is you always end up making money. It always works out.
“We’re going to have more fans than ever before. We’re going to have more people who will have eyeballs on Devin Booker and Deandre [Ayton] and Kevin Durant, Chris [Paul] and cheer the team on. And more people buying merchandise because they’re bigger fans.”
The shift comes in the wake of Diamond Sports Group, Bally Sports Arizona’s parent company, filing for bankruptcy in March. The network missed a payment to the Arizona Diamondbacks that was due April 1. The Minnesota Twins and Cleveland Guardians have also missed payments from Diamond subsidiaries, leading Major League Baseball to seek to void the rights deals so the teams could take over their broadcasts.
The Suns got all their scheduled payments from Bally Sports Arizona before their contract expired at the end of the first round of the playoffs. But the regional sports network’s financial situation likely played a role in the Suns’ decision.
Diamond Sports Group released a statement Friday saying the move by the Suns and Mercury constituted a breach of contract and violated bankruptcy law — a position Suns CEO Josh Bartelstein disputed.
“This is an improper effort by the Suns to change their broadcasting partner without permitting Diamond to exercise our contractual rights,” Diamond Sports Group said.
Said Bartelstein in a statement: “Diamond’s position is totally inaccurate. We are moving forward with this deal and could not be more excited about what it means for our fans and our future.”
As more local media rights deals expire in the near term, other NBA, MLB and NHL teams might find themselves in the same situation as the Suns and Mercury and consider shifting their games away from the cable model. Suns games had been on cable television in some form since 1981.
“We need to reimagine these relationships,” NBA commissioner Adam Silver said about regional sports networks on “The Marchand and Ourand Sports Media Podcast” last week. “In terms of the fundamentals of the business, everyone sees what’s happening in the television market. You’ve had a dramatic decline in the number of television homes.”
Ishbia, who bought a controlling stake in the Suns and Mercury in February at a $4 billion valuation, said he believes appealing to more fans will increase value in other areas, including sponsorship deals. He consulted with the NBA league office and some other owners before making a decision to go this path.
“The media world is changing,” Ishbia said. “And we think in Phoenix we’re going to be the leaders starting off with a new way of thinking about it, a new way of doing it.”
Ishbia said a price point for the streaming option, designed for younger viewers who might not own televisions, has not been determined. But the Mercury, who are soon to make their season debut and welcome back Brittney Griner, will have their games streamed for free this season.
Source: www.espn.com