Sports brand faces potential Chapter 11 bankruptcy, foreclosure
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. Under the old cable model, where pretty much every household felt compelled to subscribe, these networks were cash cows.
They provided a service — coverage of local National Basketball Association, National Hockey League and Major League Baseball franchises — that many customers wanted, and they were able to charge all customers. If you have a traditional cable package, you almost certainly pay a sports-programming surcharge.
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You can't opt out of that fee, and at the height of cable it was essentially a license for regional sports networks, many of which were owned by the cable companies in partnership with teams, to print money. That fountain of cash enabled the network owners to pay high fees for broadcast rights.
In many cases, like in Boston with NESN and the Red Sox and in New York with MSG Networks and the Knicks and Rangers, the team's owners also owned the regional sports networks. In that incestuous situation, consumers got a really bad deal.
Cable-company owners got cash to buy programming that many subscribers wanted, which led more people to subscribe. Team owners essentially got to pay themselves from those sports-programming fees, creating artificially high rates for rights.
