How Phoenix Fans Watch Their Teams May Change How You Watch Yours

How Phoenix Fans Watch Their Teams May Change How You Watch Yours

Days after Mat Ishbia reached a deal in December to buy majority stakes in the N.B.A.’s Phoenix Suns and the Phoenix Mercury of the W.N.B.A., he met with top executives to learn more about the teams’ business operations, including how local fans were able to watch their games on TV.

The executives detailed three possibilities going forward, including sticking with Diamond Sports Group, which owned the regional sports network that for more than a decade had held the rights to show the teams’ games. Diamond Sports was saddled with $8 billion in debts — it would file for bankruptcy protection in March — but it still wrote big checks worth millions of dollars a year.

Mr. Ishbia, though, gravitated to the riskiest of the three options: ditching the regional sports network model that most teams followed for decades and returning to showing Suns and Mercury games for free on over-the-air channels. It might cost the teams money in the short term, but the bet was that it would help them reach more fans, including those who dropped their cable subscriptions or, like many younger fans, never had one.

“What was interesting was the amount of people that were reaching out to me on social media about how they couldn’t watch the Suns games,” Mr. Ishbia said in an interview, adding: “It’s their team. It’s not Mat’s team. To not be able to watch your game wasn’t an option that we were interested in.”

In April, the organization announced that it would leave Diamond Sports and broadcast all Suns and Mercury games on over-the-air channels with the company Gray Television. They sent thousands of free antennas to fans who needed them. They also created a streaming option with the company Kiswe.

Mr. Ishbia’s decision shook a sports media world — clubs, leagues, networks, cable and satellite providers — trying to navigate the decade-long shift in how fans watch their home teams. Those used to finding games on one channel are having to search for them elsewhere as networks and leagues reshuffle their distribution deals in response to the rise of cord cutting and the boom in streaming. Some clubs could face shortfalls as they search for ways to replace revenue lost by the end of local media deals, potentially hindering their ability to bid for top players.

More teams are expected to overhaul their local media deals in the coming months as their contracts expire. Those that choose to show more of their games on free television are returning to a world that the N.F.L., which shows more than 90 percent of its games on over-the-air channels, never abandoned.

“It’s back to the future,” said Michael Nathanson, a media analyst at MoffettNathanson. “As more people cut the cord, these teams are losing their ability to reach their fans. So why not put it over the air for free and also build a streaming product that’s more accessible for younger fans.”

The Phoenix-area franchises are part of a growing wave of teams doing the same. The San Diego Padres, like the Diamondbacks, ended their agreement with Diamond Sports, the largest regional sports network provider. Major League Baseball used its broadcasting and streaming capabilities to keep the teams on the air and guaranteed they would get 80 percent of the revenue they received in their Diamond Sports deals.

Diamond Sports, which must make at least $400 million in annual debt payments, is in talks with its creditors, some of whom want to reshape the company’s business while others want to be bought out. Diamond Sports is also in talks with the N.B.A. and other leagues about reducing their rights fees.

A company spokesperson declined to comment on the talks with creditors and the leagues.

Last year, Monumental Sports Network, which is owned by Ted Leonsis, the owner of the Washington Wizards (N.B.A.), Capitals (N.H.L.) and Mystics (W.N.B.A.), bought NBC Sports Washington and unveiled a new streaming service. The N.H.L.’s Vegas Golden Knights said in May that they planned to shift to a free over-the-air channel. The N.B.A.’s Utah Jazz and Los Angeles Clippers are selling their games and programming directly to viewers with streaming packages, with the Jazz also broadcasting their games on a free channel.

The Jazz are “probably the largest real media company in the state,” Ryan Smith, the team’s owner, said in an interview this year. “If you actually think about the N.B.A., we’re not that different than a media or tech company.”

Mr. Smith said he expected most teams to take over their broadcasts entirely within three years.

Major League Baseball and the N.B.A. have been preparing for this possibility for years. When Sinclair, Diamond’s parent company, bought the regional sports networks from Fox Sports in 2019, M.L.B. made a bid because it wanted to control as much of its content as possible, Commissioner Rob Manfred said.

“That was a product of our belief the media was going to change dramatically,” he said, noting that 11 major league teams still have contracts with Diamond Sports.

Local media deals have traditionally been handled by the clubs, but in January, M.L.B. hired executives from regional sports networks to develop contingency plans, like taking back the rights to Padres and Diamondbacks games and showing them on MLB.TV’s subscription service, as well as an array of cable and satellite companies. The broadcasts included the same announcers.

Jason and Wendy Dow, who live in Queen Creek, south of Phoenix, canceled their cable package with Cox this summer to save money and signed up for YouTube TV. Now they watch the Diamondbacks using the MLB app, which they said had better streaming functions.

“I was kind of upset at first, but it’s turned out to be better in the end,” Jason Dow said at a recent Diamondbacks home game. “On the old feed, you basically just saw the game without a lot of extras.”

The N.B.A. began preparing for changes in 2018, creating a “next gen” service that includes a streaming service and production and distribution support that teams can use to stream broadcasts. So far, the Clippers, the Jazz and the Suns are using it.

Diamond’s bankruptcy doesn’t affect every team. Franchises like the New York Knicks, the Denver Nuggets and the Wizards in the N.B.A. and the New York Yankees and the Boston Red Sox in baseball own their networks. Other teams are locked into long-term deals, like the Los Angeles Dodgers, who signed a 25-year, $8.35 billion deal with Time Warner Cable in 2013 and have part ownership of their regional sports network.

While the deals bring in dependable checks, some teams are reaching a shrinking viewership because of cord cutting. For others, like the Nuggets and the Dodgers, disputes with carriers like DirecTV and Comcast meant their games weren’t available to most people in their markets for part of their contracts.

The Suns first had games on cable television in 1981, and started broadcasting games on Fox Sports, which later became Bally Sports, in 2003.

“​At the time it seemed pretty good, pretty solid,” said Jerry Colangelo, who was with the Suns as an executive and then an owner from 1968 until 2004. “And they had some strong years of growth, for sure.”

Instead of outsourcing the production and ad sales to the networks, the Suns produced their own content “to control our own destiny,” Mr. Colangelo said.

The Suns continued to produce their own games and sell their own ads after Mr. Colangelo sold the team. That gave them and the Mercury a head start when Mr. Ishbia decided to change course. Most other teams will have to create those resources if they cut ties with regional sports networks.

The early results have been positive. Viewership for Mercury games jumped 418 percent last season, said Josh Bartelstein, chief executive of the Suns and the Mercury.

Mr. Ishbia said getting fans hooked on the Suns and the Mercury was the goal. He has made big (and expensive) moves since buying the team, trading for the highly paid stars Kevin Durant and Bradley Beal, and investing more than $100 million in a new practice facility for the Mercury and a new headquarters for both teams.

“I’m not focused on money,” Mr. Ishbia said. “We’re focused on success. We’re focused on fan experience. And money always follows those things.”

He added: “I think other teams will follow whether they have to or whether they want to. I think this is the future.”




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