Iconic sports brand faces foreclosure, Chapter 11 bankruptcy
The legendary company has struggled to stay afloat despite its teams' relative success on the court and ice.
The cord-cutting phenomenon has devastated regional sports networks (RSNs). Under the old cable model, where pretty much every household felt compelled to subscribe, RSNs were cash cows.
They provided a service — coverage of local NBA, NHL, and Major League Baseball franchises — that many customers wanted while being able to charge all customers. If you have a traditional cable package, you almost certainly pay a sports programming surcharge.
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That's not a fee you can opt out of and at the height of cable it was essentially a license for RSNs, many of which were owned by the cable company in partnership with a team, to print money. That fountain of cash allowed the RSN owners to pay high rights fees for broadcast rights.
In many cases, like in Boston with NESN and the Red Sox and in New York with the MSG Networks and the Knicks and Rangers, the team's owners were also the RSN owners. That created an incestuous situation where consumers got the raw end of the deal.
Cable company owners got cash to buy programming many (but not all) subscribers wanted, which led more people to subscribe. Team owners essentially got to pay themselves from those "sports programming fees, creating artificially high rights rates.
