Utah Jazz Streaming Service Is a Test for NBA, NHL Post-RSN Model
Utah Jazz owner Ryan Smith at the team’s practice facility in Salt Lake City.
Photographer: Michael Friberg for Bloomberg BusinessweekIn June the Utah Jazz announced that they were quitting cable. For most of the past two decades, the team had telecast its games on a regional sports network, or RSN. It was, while it lasted, a lucrative arrangement.
> Beginning with several dozen games per year in 2004 and moving to an exclusive agreement for local telecasts in 2009, the Jazz sold their rights to a network that, after several ownership and branding shuffles, came to be known as AT&T SportsNet Rocky Mountain. In the final year, the network was paying about $25 million per season.
The team used the money to
help pay for the talent that fans tuned in to see. In 2020 the Jazz gave
7-foot-1 All-Star center Rudy Gobert, who’s since moved on to the
Minnesota Timberwolves, a five-year, $205 million contract extension.
The network, in turn, used the programming to drive negotiations with
pay-TV providers, who paid a monthly fee for every household that had
the channel as part of a satellite or cable package. And carriers, for
their part, passed along the fees to subscribers in their monthly bills.
Everybody won—especially Gobert.
This summer the Utah Jazz announced that they were quitting cable. For most of the past two decades, the team had telecast its games on a regional sports network, or RSN. It was a lucrative arrangement—while it lasted.
The same basic setup has been in place for teams across the National Basketball Association, National Hockey League and Major League Baseball for decades, helping to drive ever-increasing franchise valuations. Here comes the but: as US consumers abandon cable, the regional model is under threat.
The Jazz, whose RSN went out of business earlier this year, are among the first to face the consequences of the cable industry’s decline and one of the first to try to figure out what comes next. It’s thrust the Jazz—long an outlier in the NBA—into the spotlight.
Beginning this season, the team is broadcasting its games on the free-to-air station KJZZ (pronounced “K-Jazz”) as well as through a paid streaming service called Jazz+.
The Rise and Fall of AT&T SportsNet Rocky Mountain
Subscriber losses became a drain on revenue for the Utah Jazz’s longtime regional sports network
Source: S&P Global Market Intelligence estimates
As the cable industry continues to crumble, the rest of the NBA (along with the NHL and MLB) will be watching closely to see if Utah’s approach amounts to a step backward or a way forward.
> “It’s a pretty easy analysis to look out and say that the RSN model will not be around the way we know it,” says Jazz owner Ryan Smith.
> “Then the question becomes, are we going to wait and ride it out as long as we possibly can?
> Or are we going to take the hit now and start with a new model and get ahead of it?”
Terms of the deal with KJZZ’s owner, Sinclair Broadcast Group, weren’t disclosed, but S&P Global Market Intelligence estimates that this season the Jazz will bring in 50% to 70% of the revenue they were getting from AT&T SportsNet, depending on their ratings and how many streaming subscriptions they sell.
It’s a significant setback, Smith acknowledges, though he’s confident it’s temporary—and comes with a big upside for Jazz fans.
“It’s innovation and forward-thinking,” says Daniel Cohen, a media rights consultant at Octagon Inc., “but innovation and forward-thinking does not always mean more revenue.”
And that part is where the Jazz is getting creative.
Like The Suns, Jazz Are Ditching Their Cable Regional Sports Network
- Jazz games next season will air locally on Sinclair's free KJZZ channel.
- The team will also launch a paid service to stream games as cable RSNs continue to lose rights
Utah Jazz launch Jazz+ streaming service as RSN alternative
DTC subscription platform to offer more than 80 live game streams covering all non-nationally televised games.
Getty Images
The National Basketball Association’s (NBA) Utah Jazz have launched their own direct-to-consumer (DTC) streaming service Jazz+.
Confirmed:
- Subscribers can watch more than 80 live games, including all Jazz preseason and regular season games, excluding matchups broadcast on national television
- Video-on-demand (VOD) replays to be available for every locally televised game
- Original shows include behind-the-scenes content, highlights and alternative broadcast streams
- Annual subscription priced at US$125.50, while a monthly subscription will cost fans US$15.50
- A pay-per-view (PPV) option for single-game purchases will be priced at US$5 and will launch on 25th October
Context:
The Jazz announced plans to develop a paid subscription-based streaming service in June, as an alternative to a traditional regional sports network (RSN).
Fans can also watch non-nationally televised games on local TV station KJZZ via an over-the-air antenna or through local cable and satellite providers that carry the Sinclair-owned channel.
Comment:
“This season, we have so many reasons to celebrate being a Utah Jazz fan – from the return of Delta Center and our 50th anniversary season to the launch of Jazz+ and the ability for anyone in Utah to watch Jazz games on KJZZ,” said Ryan Smith, chairman of Smith Entertainment Group (SEG) and governor of the Utah Jazz.
“With Jazz+, we have created 24/7 digital access to the team.
We are so excited that all Utahns can be with us for every minute of the action.”
Coming next:
Those who purchase an annual subscription before the team’s opening regular season game on 25th October also earn two tickets to a Jazz home game at Delta Center, as well as team merchandise.
Posted: Sep 27, 2023
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