Why some U.S. sports teams are launching their own streaming platforms

When the new NHL season starts next month, fans of the Dallas Stars will be able to watch matches in a way they haven’t before.

All regional broadcasts of the team’s games will stream on Victory+, a free ad-supported streaming platform that launched this summer. It joins other team-focused sports streamers that have emerged recently and that are aiming to attract the most loyal and local sports fans, including for the NHL’s Vegas Golden Knights and the NBA’s Washington Wizards, Utah Jazz and Phoenix Suns.

The trend isn’t just a signal of a changing sports media landscape, the transformation of which streaming plays a key part. It’s also a reflection of the shaky status of regional sports networks (RSNs) around the U.S. whose business models are being threatened by cord-cutting. The owner of the largest RSN portfolio in the U.S., Diamond Sports Group, is under bankruptcy protection. These economic factors are forcing some teams, owners and networks to find alternative solutions.

“A lot of NHL, NBA and MLB teams are at a pivotal time right now in terms of local rights distribution,” says Scott Robson, a senior research analyst at S&P Global Market Intelligence. “The RSNs have provided a steady stream of income to the teams for the past few decades and that’s being challenged.”

What’s at stake? For major leagues like the NBA, NHL and MLB, much of their revenue still comes from local media agreements (23% of the MLB’s revenue came from local media in 2022, for instance).

Meanwhile, national sports rights are commanding bigger deals than ever before, and national sports viewership is at a fever pitch. For local broadcasters to capture that wave of interest, there’s an urgent need to find new technology partners to reach fans.

“At the same time that the RSNs are running into trouble, the interest in the content is higher than ever before and people want to watch it in different ways,” says Wim Sweldens, co-founder and CMO of Kiswe, a streaming technology company behind the Jazz’s streaming service, Jazz+, and more.

What’s happening with the RSNs?

To understand a fundamental reason why local sports broadcasts would be shifting to streaming, it’s essential to understand the state of the RSN. And the best way to do that is to look no further than the state of Diamond Sports Group.

Diamond owns the regional sports rights to dozens of teams across the NBA, NHL and MLB, but has been under bankruptcy protection since last year. In June, lawyers for the NBA and NHL voiced concerns about the viability of Diamond’s business during a bankruptcy court session. (The leagues recently agreed to terms with Diamond ahead of their upcoming seasons, but Diamond is still awaiting a bankruptcy hearing scheduled for November that could decide its fate.)

Further, Puck recently reported that Amazon is likely to pull a planned investment in Diamond, though the tech giant is still considering a deal with the group. At any rate, Sweldens says that “Big Tech isn’t the answer” to RSN woes, as a large party would sit between teams and their fans.

So it’s no wonder that some teams are taking matters into their own hands. Victory+ launched earlier this year after the Dallas Stars severed ties with its Diamond-owned regional network; while the Stars are the platform’s first client, it intends to welcome other teams in the future.

“We feel like direct-to-consumer is the future for local sports, certainly, and we’re ripping the Band-Aid off and going there,” Stars President and CEO Brad Alberts told Sports Business Journal in July.

“Many are still saying, ‘We’ll take the [RSN] money as long as it’s there and stay consistent with what we’ve been doing for the last 20 years,’” he said. “But we made the decision and finally said, ‘You know what? Enough’s enough. Let’s get out of this. Let’s control our own destiny and not be tied to this thing anymore.’”  

What’s the benefit of going direct-to-consumer?

As the RSN linear business faces headwinds, there is an opportunity for teams to form a more direct relationship with fans that they don’t necessarily have under traditional media deals.

“It can aid teams in personalizing the experience,” says Anthony Amey, a professor of practice for sports media at Virginia Tech, of team-focused streamers.

The platforms can be more advantageous for advertisers too.

“The experience we provide isn’t fundamentally different [from a linear broadcast], but we can include programmatic ads,” Sweldens says. “The ad break isn’t fundamentally different, but the tech is different. There is a much larger opportunity looming [for advertisers].”

The trend is still nascent, though, and it remains to be seen just how successful the platforms can be in building a sustainable business model that can make up for rights fees from RSNs, whether it’s through subscribers or advertising or a mix of both. Not to mention, there is always the looming possibility that major streaming platforms could have their eye on local rights, something that is already being speculated and reported on when it comes to the MLB.

“I think the price [of a subscription] is a lot for many consumers, but everyone is monitoring the growth of those services closely to see if that’s a viable way forward for local rights,” Robson says.

But if it works, the team-focused streamer model can help chart a bold future for local sports that incentivizes more teams to follow suit.

“[Digital rights] are going to evolve drastically because this is a brand-new area of business,” Kris Knief, VP of strategy and innovation for the Vegas Golden Knights, told Sports Video Group last year. “With increased distribution, the game is going to reach a younger demographic of next-generation fans. In the end, this is the next-best thing for all teams.”