Game Time For A New RSN (Yes, A New RSN)

LocalProximity
Written By Tim Hanlon

The new Chicago Sports Network (CHSN) launched in earnest on Tuesday, marking a bold new chapter for regional sports broadcasting in the Windy City. As we highlighted back in August, this ambitious venture, a joint partnership between Jerry Reinsdorf (owner of the Chicago Bulls and White Sox), the Wirtz family (owners of the Chicago Blackhawks), and Standard Media, aims to revolutionize how Chicago sports fans consume content for some of their most beloved teams. However, CHSN's emergence comes at a time when the regional sports network (RSN) model is facing unprecedented challenges, making this objectively counter-intuitive launch a decidedly risky move in the rapidly evolving landscape of sports television.

A New Era for Chicago Sports

CHSN emerges from the ashes of NBC Sports Chicago, which is ceasing operations after a memorable 20-year run. The new network will be the exclusive home for local Blackhawks, Bulls, and White Sox games, offering more than 300 live broadcasts annually, along with extensive pre- and post-game coverage.

One of CHSN's most innovative features is its commitment to fan engagement. The network is constructing atrium studios at both the United Center and Guaranteed Rate Field, allowing fans to interact with live broadcasts and potentially participate in programming. This approach aims to capture the energy of popular shows like ESPN's College GameDay.

Distribution and Accessibility

CHSN's launch strategy focuses on maximizing accessibility. The network has secured linear MVPD distribution deals with DirecTV and AT&T U-verse, and is reportedly close to finalizing an agreement with overbuilder Astound (formerly RCN). However, a glaring omission in its distribution lineup is Comcast/Xfinity, the dominant cable provider in the Chicago area with nearly one million subscribers. The only virtual MVPD lined up at launch is DirecTV Stream.

In an innovative twist, CHSN is also expanding its reach by partnering with Hammond, IN-based WJYS-Ch. 62 to offer over-the-air (OTA) broadcasts on two digital subchannels (62.2 and 62.3), allowing viewers with a strong antenna in the southern Chicago market to access its content for free. Additional OTA markets include Rockford, IL (WSLN 19.3 and 19.4) and South Bend, IN (WNDU 16.2 and 16.4), with more channels coming soon in Milwaukee, Grand Rapids, Des Moines, Indianapolis, and other regional cities.

The Declining RSN Landscape

CHSN's launch is counter to the current trend in the industry. The RSN business model, once a cash cow for sports teams and broadcasters, is rapidly deteriorating. The primary culprit is cord-cutting, with millions of Americans abandoning traditional cable packages. This trend has severely impacted RSN revenues and led distributors to question the value of carrying these networks. The bankruptcy of Diamond Sports Group, which operates the Bally Sports networks, is a stark illustration of the industry's struggles.

Despite its ambitious plans, CHSN faces significant hurdles:

  • Distribution Challenges: The lack of a carriage agreement with Comcast will severely limit the network's reach in its crucial home market. Negotiations are ongoing, but even if a deal is struck, it's reasonable to assume that CHSN will be placed on a higher-priced premium tier, potentially limiting accessibility, and certainly pressuring expected subscriber fees.

  • Team Performance: The currently woeful performance of the teams CHSN will broadcast doesn’t help either. The White Sox just set a modern-era MLB record for losses, the Bulls haven't won a playoff series since 2015, and the Blackhawks are in the midst of a rebuilding phase. This could impact viewership and, consequently, advertising revenue.

  • Changing Viewer Habits: As more consumers opt for streaming services, CHSN's traditional cable-based model will likely struggle to attract younger audiences; one would think that a DTC streaming app has to be on the outlet’s strategic roadmap, but so far, nothing has been announced or even mentioned.

That said, CHSN has a unique opportunity to carve out a niche in the market with its stated aspirational focus on local sports content that extends beyond its three anchor clubs. By covering high school sports and a broader range of Chicago's pro and college teams, along with Chicago-centric programming like the nightly "Chicago Lead," CHSN can differentiate itself and attract a wider audience. The network's commitment to OTA broadcasting also aligns with industry trends, as more teams explore alternatives to traditional RSN models.

Looking Ahead

While Chicago Sports Network’s leadership remains optimistic, industry trends suggest that this venture is a highly risky endeavor. As RSNs struggle nationwide and teams increasingly explore more direct-to-consumer options, CHSN's traditional model seems wildly out of step with TV sports market dynamics. The network's success will likely depend on its ability to rapidly adapt to changing viewer preferences, overcoming its significant distribution challenges, and, of course, at least one of its founding teams improving in the standings.

Tim Hanlon

Tim Hanlon is the Founder & CEO of the Chicago-based Vertere Group, LLC – a boutique strategic consulting and advisory firm focused on helping today’s most forward-leaning media companies, brands, entrepreneurs, and investors benefit from rapidly changing technological advances in marketing, media and consumer communications.

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