Regional Sports Networks Feasted on Cable Fees. What Happens as They Dry Up?

As the World Series heads into Game 4 on Tuesday, Major League Baseball is enjoying its biggest national television spotlight of the year. But the business of showing its teams’ regular-season games back home is facing a much tougher financial reality. For decades, regional sports networks, or RSNs, have been the primary television home for local professional sports. Channels such as Boston’s NESN and New York’s MSG Networks pay teams for the rights to broadcast their games, then make money from advertising and fees paid by cable and satellite providers. Unlike national sports networks, they generally serve specific markets and carry games from just a handful of local teams. That business model is unraveling as households abandon traditional pay TV. Like other cable networks, RSNs are losing subscribers and distribution revenue. But their reliance on expensive rights agreements with a limited number of teams makes them especially vulnerable. Also, like other cable properties, they’re trying to carve out a future with streaming, but so far that hasn’t generated enough money to replace what RSNs are losing from traditional pay TV. “Cutting costs alone isn’t a growth strategy, and adding subscribers without a sustainable business model isn’t enough either,” NESN CEO David Wisnia told TheWrap. “You need both.” Some operators, including NESN, are cutting costs and expanding streaming while remaining profitable. Others, including the now-shuttered Main Street Sports Group, couldn’t meet their financial obligations. The question is whether surviving RSNs can still afford the lucrative rights agreements that helped build their businesses — or whether teams will have to accept smaller payments. Sports media analyst Patrick Crakes calls RSNs the “hothouse flowers” of pay television, a reference to how dependent they became on the economics of the cable bundle. In some traditional RSN businesses, fees paid by cable and satellite distributors accounted for 80% or more of revenue, he said. Those networks collected money from households that rarely watched their games, providing financial support that streaming subscriptions alone can’t easily match. Teams are responding in different ways. Some are sticking with regional networks, others are taking greater control of their broadcasts, and some are moving games to local television stations that fans can watch free with an antenna. The NBA’s Phoenix Suns, for example, left Bally Sports Arizona in 2023 for a deal with local broadcaster Gray Media, replacing their traditional RSN arrangement with free over-the-air games and a streaming option. While the Suns moved to local broadcast TV, Major League Baseball is taking a different approach, assuming responsibility for producing and distributing local games through cable, satellite and streaming, essentially displacing the RSNs. MLB now produces and distributes games for 14 clubs, whose combined television and streaming viewership increased 10% during the 2026 regular season. But the audience gains haven’t made up for the revenue teams previously received under traditional RSN agreements. The financial disruption extends across professional sports. Just 34 U.S.-based MLB, NBA and NHL teams still use a traditional or similar RSN model, down from 83 in 2022, according to updated estimates from S&P Global Market Intelligence’s Kagan unit. Industry revenue fell to an estimated $6 billion in 2025, roughly 30% below its 2019 peak. Kagan estimates that the number of U.S. households with access to regional sports networks fell nearly 14% in 2025 to 79.4 million. But Michael Johnson, an analyst with Kagan, cautioned against treating all RSNs alike, noting that some are better positioned to withstand the industry’s contraction than others. “I think it’s a combination of several different factors,” Johnson told TheWrap. “Obviously, the big markets help.” He pointed to hybrid distribution models combining traditional pay TV, streaming and free over-the-air broadcasts, as well as teams taking greater control of their own production and distribution. “It’ll be interesting to see over the next few years which of these strategies are working the best,” he said. Why some RSNs are holding on NESN, which carries Boston Red Sox and Bruins games, offers one example of how a regional network is adjusting without abandoning traditional television. Under CEO David Wisnia, who arrived roughly two years ago, NESN has focused on cutting operating costs while investing in streaming and other digital businesses. Operating overhead has fallen 11% during his tenure. The network said it remained profitable in 2025 and exceeded its earnings expectations for the year, even as the broader industry contracted. NESN’s digital business is also growing. Subscription revenue from NESN 360 increased 47% during the first nine months of 2026 compared with the same period last year, while digital advertising revenue rose 65%. Those gains haven’t eliminated the pressure on earnings. NESN said its profits are still declining, though the pace of that decline has slowed by more than half. Traditional pay TV still accounts for most of its revenue. “I don’t see it as a dollar-for-dollar replacement of cable revenue,” Wisnia told TheWrap, referring to streaming. Rather than relying on streaming alone, NESN has focused on lowering expenses while developing additional revenue sources. It has partnered with ViewLift on streaming technology and Sporting News on website content, while investing in original programming and reducing the annual price of NESN 360. NESN also manages SportsNet Pittsburgh, which carries Pirates and Penguins games, and is exploring similar opportunities in other markets. NESN’s efforts show how an established network can remain profitable while reshaping its business. But other operators have faced a steeper financial challenge. The cost to carry sports programming MSG Networks, which carries the New York Knicks and Rangers, reported an 18% decline in revenue to $87.3 million for the quarter ended June 30, according to parent company Sphere Entertainment. Subscribers declined approximately 16.5%, while adjusted operating income fell roughly 70% to $11 million. The network nevertheless posted an $8.3 million operating profit for the quarter. Across the industry, the cost of carrying local sports remains substantial. Kagan estimates that RSNs spent approximately $4.4 billion on programming in 2025, compared with roughly $6 billion in total industry revenue. Main Street Sports Group, which operated the FanDuel Sports Network channels, couldn’t sustain its business. Nine MLB teams terminated their agreements with the company in January amid rights-payment problems. Main Street subsequently wound down operations, and its streaming service shut down in September. Crakes said Main Street faced a disadvantage beyond declining cable subscriptions. Although it operated numerous RSNs, it lacked other major programming channels that could strengthen its hand in negotiations with cable and satellite distributors. “Main Street had substantial scale in the number of RSNs it owned,” he said. “What it lacked was a broader channel portfolio to negotiate alongside them.” That weakened Main Street’s ability to protect its carriage agreements and pricing, according to Crakes. Networks negotiating alongside other valuable channels may have more leverage as the cable bundle shrinks. What comes after the cable bundle? For Major League Baseball, the breakdown of traditional RSN agreements is already changing who produces local games, where fans can watch them and how much teams earn. When MLB takes over a team’s local broadcasts, the league handles production and arranges distribution instead of relying on a traditional regional network to do those jobs. Fans can still find games through participating cable and satellite providers, alongside an in-market streaming option. Some clubs also air games on free local broadcast stations, though those arrangements are separate from MLB’s takeover of production and distribution. The league added nine clubs to its local media operation this year, bringing the total to 14 for which it handles production and distribution. It also provides streaming services for eight additional clubs or their RSNs, meaning MLB is involved in local media for 22 of its 30 teams. Eleven of the 14 clubs under MLB’s local media operation posted double-digit viewership increases during the 2026 regular season. Across all 29 U.S.-based clubs, combined television and streaming viewership rose 3% from the previous year. The audience gains haven’t solved the broader financial problem confronting clubs that have lost traditional RSN agreements. “The erosion of the RSN model has reduced revenue for the impacted Clubs, most dramatically for the smaller market Clubs,” an MLB spokesperson told TheWrap. The league said the decline has widened the revenue gap between large- and small-market teams. It also expects bigger-market clubs to face increasing pressure as cable subscriptions fall. MLB has proposed sharing local media revenue equally among all 30 clubs as part of its collective bargaining proposals to the players’ union. The league argues that a more centralized approach could eventually eliminate local television blackouts. No agreement has been reached. For now, MLB expects more clubs to join its local media operation as an interim step toward a more centralized system. Meanwhile, RSNs that still have traditional distribution agreements are finding new ways to reach streaming customers. YES Network, the New York Yankees’ regional sports network, and MSG Networks announced a deal with DAZN in July, making the platform their exclusive direct-to-consumer streaming home while preserving existing pay-TV distribution. Crakes said the partnership could allow the networks to share technology and distribution capabilities rather than build everything themselves. Fubo also announced seven agreements on Oct. 22 to carry local NBA games through a mix of broadcast stations and team-controlled programming. The arrangements give networks and teams more ways to reach fans without relying entirely on the shrinking cable bundle. Crakes expects many teams and networks to combine traditional pay television, streaming and free over-the-air broadcasts, with the mix varying by market. He calls the approach the “Tri-Cast.” For teams, the trade-off is substantial. Under traditional RSN agreements, clubs generally received negotiated rights payments while networks collected revenue from distributors and advertisers. Teams taking greater control of their broadcasts may reach more fans, but also assume more expenses and financial risk. Crakes said some networks could remain profitable even if teams accept smaller rights payments, provided their agreements reflect what those businesses can realistically earn. He expects more clubs to change their local television arrangements, though not necessarily abandon regional networks or traditional pay TV. “The test is sustainable cash generation after rights and operating costs,” Crakes said. Regional sports networks aren’t necessarily disappearing. But those that survive will have to make money from local sports rights without the lucrative cable economics that supported them for decades.