RSNs have Blueprint for Dealing with Autumn Work Stoppage

NHL Lockout

(from Sports Business Journal, September 24, 2012) Regional Sports Networks (RSNs) are preparing once again for a work stoppage in a popular professional sport in the autumn season.  Last year the NBA went through a brief lockout, and this year the NHL is in a work stoppage.  Executives are repeating the process of trying to quickly fill live games if the NHL and the NHLPA cannot agree to terms before October 11, the scheduled start of the season.  While executives may now be experienced with the situation, that doesn’t make this year’s task any easier.  “Live sports are the cornerstone of what we do,” said Jeff Krolik, Executive Vice President for Fox Sports Networks, which holds rights to 13 NHL teams, “when we lose live local sports, that’s not good for us. You can’t replace it.”

NHL game ratings are normally lower than those of the MLB and NBA, but they are still higher than the other live sports that RSNs broadcast.  Comcast’s RSNs will attempt to fill the gaps left by the NHL by airing more studio programming, as well as more coverage of local NFL teams.  Fox Sports Networks plans on relying on college football, soccer, and UFC to lessen the blow.  While this may be a plausible short-term solution, most executives believe it will become more of a problem if the lockout extends beyond football season, which ends in early February.

Cable operators are likely to enforce contract clauses that require RSNs to provide a certain number of live games or else distributors will be given a rebate.  Different networks have different contracts, but the clauses usually take effect after 20 games missed.  The rebates can range anywhere from 10% to 50% depending on a team’s ratings and the number of live games broadcast from all sports.

These rebates didn’t factor in last year since the NBA lockout only lasted 16 games.  The immediate impacts of the NHL work stoppage might not be devastating, but the longer the lockout lasts, the more the RSNs will be negatively affected.