AT&T Sportsnet Terminating Penguins Rights, Bankruptcy Looms
The Pittsburgh Penguins and Pittsburgh Pirates might have a problem. AT&T Sportsnet, which broadcasts its games on local and regional cable systems, is teetering on bankruptcy and is getting out of the local sports business.
And it might come at the worst possible time for Penguins fans as the NHL season winds to a climactic close.
According to a report in the Wall Street Journal, Warner Bros. Discovery will cease participation in the regional sportsnet network operations by March 31 and fail to make the future rights holder payments.
Cord cutting and the lack of streaming by RSNs (Regional Sports Networks) have been crippling to the business model. According to the letter obtained by the Wall Street Journal sent from the unit’s president, John Crumb, to the four affected networks in Pittsburgh, Houston, Colorado, and Utah, Warner Bro. Discovery will not cover the shortfalls of the RSN division.
The letter suggested the networks transfer control of TV rights and programming to the teams for no purchase price to avoid future claims by the teams against the networks.
The letter also stated Chapter 7 liquidation bankruptcy is possible if agreements cannot be worked out by March 31.
In other words, the network hopes to give back the rights and offer control of AT&T Sportsnet Pittsburgh to the teams in exchange for not being sued. If the Penguins and Pirates refuse or cannot agree, AT&T Sportsnet could be dissolved and assets sold.
WSJ also reported the media properties were not a priority for WBD, which has been trying to divest them for some time. The parent company is dealing with a heavy debt load and a struggling TV and streaming business.
Last week, MLB commissioner Rob Manfred said baseball would assume in-market broadcasts if Sinclair owned Diamond Sports Group, which operates the Bally’s Sports Networks, entered bankruptcy. However, NHL commissioner Gary Bettman has not yet made a public comment.
AT&T previously owned the networks, and WBD acquired them when it took control of WarnerMediaAssets. AT&T Sportsnet typically carries most, if not all, Pittsburgh Penguins regular season games and the first round of the playoffs.