In July, I wrote a lengthy explainer about why and how MLB blackout policies work. In short, they are not overall policies of Major League Baseball; they are agreements signed between each team and their Regional Sports Network. The exclusivity compels cable providers in a wide territory to offer a specific team’s RSN, and in turn for that RSN (and often their MLB team partner) collects monthly fees from every cable subscriber in that territory.
It’s a terrible arrangement for fans, but it’s made teams and RSNs a boatload of cash for the better part of 20 years. Even so, cracks in the dam have been evident for years now. Disputes with cable, satellite and streaming providers - which were once just bluster - now routinely lead to RSNs being dropped by the carriers.
When I wrote that piece in July, Cardinal games via Fox Sports Midwest were available only via cable, DirecTV or Hulu streaming. Dish Network, Sling and YouTubeTV had all cut ties. Soon after the season ended, Hulu dropped FSMW and all Sinclair-owned RSNs as well, leaving only cable or DirecTV as options.
It has been a standoff with no clear end-game. RSNs rely on those carrier fees to cover their costs - including the enormous contracts they signed with pro sports teams for exclusivity. As more consumers have “cut the cord,” providers are increasingly unwilling to pay such high fees to carry RSNs.
Fans routinely opine “why don’t they just let me pay for a stand-alone subscription?” The problem is that all those fans buying stand-alone subscriptions are not going to offset the RSNs getting maybe $3 per month from every cable and satellite subscriber in the region. On top of that, the opportunity to subscribe just to the live ballgames would drive even more customers to cut the cord, making the RSNs less valuable to the carriers anyway.
A new model with an infusion of new revenue was needed to break this impasse, and it looks like it has arrived in the form of sports gambling.
Fox Sports Midwest (along with most other RSNs acquired by Sinclair) will be renamed some permutation of Bally Sports, thanks to a deal with gaming and casino giant Bally’s Corporation.
Sinclair President and CEO Chris Ripley promised more integration of sports betting into the broadcasts, in an effort to “gamify sports.” That may involve some new technology for viewers to place bets via the TV or app they are watching on. But even without some new technology, if betters are watching the game and placing bets on their mobile apps - and they are - if Bally’s can drive those fans to bet via their book rather than DraftKings or William Hill or someone else, that’s a money-maker.
The silver lining for Cardinals fans is that this deal aims to provide more options for you to watch the games. Ripley also announced a plan to offer a standalone subscription for RSNs in their given territories. In other words, you will be able to subscribe to just Bally Sports Midwest (or whatever it’s called). Ripley promised this was being developed aggressively and would launch next year, though it is not clear if that will happen before Opening Day.
My guess is this will come in the form of a Bally Sports Midwest App, likely available on all your mobile devices, AppleTV and Roku, etc. And yes, I would expect that while you are streaming the game on your Bally’s Sports Midwest App, you can get some action on the Jack Flaherty strikeout prop.
On one hand, Sinclair’s choice to offer a standalone app could mean they are no longer interested in getting their RSNs back on Dish, Hulu, etc. But I suspect it will go the other direction and you will have even more options to watch games.
The stalemate between RSNs and carriers has been about how to divide a dwindling pie. This Bally’s deal puts a lot more money in that pie. Yes, Bally’s paid a reported $85 million straight-up for the naming rights. But even more significantly, Sinclair is getting a 15% stake in Bally’s. So whether directly or indirectly, Sinclair is getting paid a little cut every time a fan places a bet with the Bally’s book.
A bunch of fans paying maybe $20 per month to stream games was not enough to move the needle. But now imagine a significant portion of those fans not just paying to watch the games, but placing bets and absolutely losing their ass. That’s a whole different equation.
If you’re Sinclair, you might be willing to consider a lower fee from Dish or Hulu or whoever in this new reality. When you’re essentially making money on every bet that gets placed, you have a new incentive to get your broadcast in front of as many eyes as possible, even if the broadcast fee itself is lower.
I realize there are folks with moral obligations to gambling, and there’s certainly a degree to which the gambling integration into the broadcast could detract from simply watching the game. But at a time when the broadcast itself was becoming increasingly difficult to find, this should increase visibility - and I think that’s a good thing.