Could Amazon Get Into The RSN Game? (And Why Would They?)

Dec 19

Regional sports networks have seemingly been hanging by a thread for years now.

Since the the start of the pandemic in 2020, the once-successful idea behind the networks — sports channels that subsist entirely on live, studio and archive content for local sports teams — has collapsed as part of the wider fall of the cable bundle and a larger shift in sports viewing. And it’s still getting worse for the many RSNs owned and operated by Diamond Sports Group.

Diamond Sports declared bankruptcy in March 2023, and has since lost the rights to a variety of teams across the NBA, NHL and most importantly, MLB. Various reports this week indicate there could be several options available for the struggling enterprise to gain a liferaft.

Former parent company Sinclair would love to buy the company back at a discount, but it’s debatable whether that actually solves problems for either party.

Meanwhile, the NBA reportedly (via SBJ) has a deal in place to regain teams’ Diamond Sports RSN rights at the end of the 2023-24 regular season. And MLB may be working on a deal (via Sportico) to keep those networks afloat as the primary place to watch regular season games for 2024. But Amazon also appears to have an interest in investing in Diamond Sports, according to Tuesday reporting from the Wall Street Journal.

Amazon’s entry into the conversation is where TVREV’s Alan Wolk and I started to hypothesize where all of this is headed — for both the leagues and for Amazon, should the wind up being involved.

As WSJ notes, there’s a streaming component here, and that distribution angle is just part of the draw for Amazon. Yes, the company has pushed to air more live sports, but it wouldn’t have to take over the entire broadcast function the same way it has with the NFL’s Thursday Night spot.

Instead, an arrangement with Diamond Sports could allow Amazon to function as a vMVPD — as it already does with other premium subscription options — and let customers tack on their respective RSN to Prime Video for a monthly fee. Amazon would be the access point for that content, and be the ones serving the ads, and of course, collecting the data… which would be much more local-specific than what it’s getting during NFL games or scripted TV shows right now.

It also sets Amazon up well to grow on the back of baseball, in particular:

Amazon’s self-serve ad business is aimed at SMBs, many of whom are local. With RSNs in the fold, the games now provide those advertisers a nice array of inventory for those companies to advertise against, at a price point that probably makes more sense than its other video offerings (but is also much more targeted).
Amazon also gets to simply increase its video inventory as an opportunity to promote its other video offerings to consumers that may not otherwise watch Amazon programs. This is especially interesting for baseball, which has a lot of interest in the middle of the country, where Amazon’s programs may not have the same penetration yet as they do on the coasts.
That increased inventory also gives bigger advertisers opportunities for more targeted ads that Amazon can charge a premium for, as the company of course knows their purchasing behaviors in full.
Lastly, the RSNs help ensure that sports fans don’t feel the need to upgrade to ad-free programming, since sports comes with ads regardless.

That’s all just the beginning, of course.

If the NBA’s deal means that many fans will be purchasing local game subscriptions directly through the league (via League Pass or another, new mechanism) starting in 2024-25, Amazon could be a natural partner there as well. Amazon could also separately wind up factoring into the NBA’s upcoming media rights negotiations, and part of that could include some sort of League Pass/local RSN tie-in. There, the same benefits would apply for Amazon, albeit with a younger and more diverse audience than that of MLB.

In a sports viewing environment where everything is increasingly a tile on your smart TV, and less a cable provider or channel to tune into, Amazon is making itself a central hub (bundle, anyone?) that consumers want for this content. Such a move seems poised to supercharge Amazon’s nascent ad business in a way that competitors won’t find as easy to mimic.