Main Street Sports Group Faces Imminent Closure, DAZN Pursues Local Rights
Main Street Sports Group (MSSG) has initiated the legal process toward a shutdown of its regional sports networks (RSNs), notifying employees of potential job terminations as early as mid-April. The move signals a likely end to the company’s attempt to navigate a challenging landscape for regional sports broadcasting, leaving the future of local game access in question for numerous teams across the NBA, NHL, and MLB.
MSSG began , with broadcast rights to 29 teams across Major League Baseball, the National Basketball Association, and the National Hockey League. However, financial difficulties quickly mounted, leading to the termination of all nine MLB franchise deals in due to missed rights payments. The company had only recently emerged from a two-year bankruptcy period, having renegotiated its agreements, but has been unable to achieve sustained financial stability.
The company has issued 60-day notices to employees under the Worker Adjustment and Retraining Notification (WARN) Act, indicating potential mass layoffs or a complete closure following the conclusion of the NBA and NHL regular seasons. Notices have been filed in Minnesota and Missouri, affecting 20 employees at the company’s Minneapolis office.
“FanDuel Sports Network is continuing to broadcast NBA and NHL games as we engage in discussions with our partners about our go-forward plans,” said Main Street chief executive David Preschlack in a statement. “While final decisions have not been made, we have issued WARN notices to employees, as required by law, regarding potential workforce impacts in the coming months. Any and all aspects of the WARN notices can be revoked at any time. We remain committed to transparency and fair treatment of our employees.”
Potential Liquidation or Strategic Partnership
According to the Sports Business Journal, MSSG could face immediate liquidation, resulting in all its RSNs going dark before the planned winddown. In such a scenario, the NBA could potentially stream in-market games through its NBA League Pass direct-to-consumer (DTC) service. However, a strategic partnership remains a possibility, potentially preserving jobs and keeping the RSNs operational.
DAZN, which previously explored a full takeover of Main Street, is now reportedly engaging directly with the 13 NBA and seven NHL teams currently holding rights with MSSG. The streaming service is exploring the possibility of acquiring those local rights for the future. However, reports suggest DAZN is seeking rights fees that could be as much as 40 percent lower than current levels, a potential sticking point in negotiations.
The situation underscores the ongoing challenges facing regional sports networks as the media landscape shifts toward streaming. MSSG’s struggles highlight the difficulties in maintaining profitability in a market increasingly dominated by DTC options and cord-cutting. The company’s recent history, emerging from bankruptcy only a year ago, demonstrates the fragility of the traditional RSN model.
Implications for Teams and Leagues
The potential loss of MSSG leaves 20 NBA and NHL teams facing an uncertain future regarding their local media rights. Local rights fees represent a significant revenue stream for these franchises, and finding alternative broadcast partners will be crucial. The leagues are reportedly considering a rolled-up approach to regional rights, potentially creating centralized packages for streaming or broadcast.
DAZN’s interest in acquiring local rights suggests a continued belief in the value of regional sports content, but the proposed reduction in rights fees raises concerns about the financial impact on teams. The outcome of negotiations will likely shape the future of local sports broadcasting for years to come.
The situation also highlights the broader trend of leagues seeking greater control over their media rights. By potentially rolling up regional rights, the NBA and NHL could increase their leverage in negotiations with streaming services and broadcasters, ensuring a more favorable financial outcome and greater control over distribution.
DAZN’s existing relationships with both the NBA and NHL – operating NHL TV globally and broadcasting the NBA in several European markets – position it as a potential key player in the evolving regional sports landscape. The company’s experience in streaming sports content and its international reach could be valuable assets as it pursues local rights deals with MSSG’s former partners.
Range Sports Media Advisory is assisting DAZN in its negotiations with the NBA and NHL teams, with David Sternberg leading the talks. The configuration of potential rights packages is expected to reflect current market trends, incorporating a mix of streaming and local over-the-air components.
DAZN has indicated it is not seeking a minimum number of teams to acquire, suggesting a flexible approach to building a regional sports portfolio. The company has also emphasized its confidence in its product and its ability to offer teams value beyond just streaming, including analytics, ticketing data, and statistical insights.
