Just a few weeks after Main Street Sports Group, the owner of the FanDuel Sports Networks, missed a rights payment to MLB’s St. Louis Cardinals, it appears that many — if not all — of the 13 NBA teams currently inked to deals with the company were not issued their January media rights payments.
Tom Friend of Sports Business Journal first reported the news on Monday.
Now, the NBA teams that did not receive media rights payments for January will send Main Street a default notice, beginning a 15-day cure period by which Main Street could hypothetically issue payments to avoid a breach of its contracts with the teams. Main Street currently broadcasts games for the Hawks, Hornets, Cavaliers, Pistons, Pacers, Clippers, Grizzlies, Heat, Bucks, Timberwolves, Thunder, Magic and Spurs.
The news comes amid wider uncertainty over the future of the FanDuel Sports Networks. Last month, the Wall Street Journal reported that Main Street is in formal talks to sell itself to London-based sports streaming platform DAZN. Later, Sports Business Journal reported that if the DAZN sale does not close, Main Street will be forced to shutter operations at the end of the current NBA and NHL seasons.
The NBA, for its part, is also preparing for a “worst-case scenario” in which Main Street shutters mid-season, leaving its 13 teams in a bind. In that case, the NBA is prepared to take over production and distribution of local broadcasts for those teams.
A sale to DAZN would be a mixed bag. The sale would ensure there was no interruption to any local broadcasts, largely keeping the status quo on the consumer side. However, teams will reportedly be faced with accepting lower rights payments than their current deals indicate. Some teams might choose to explore options outside of DAZN if that is the case. And according to prior reports, if more than 10 of the 29 teams currently under contract with Main Street across MLB, the NBA, and the NHL opt to go a different route, DAZN would pull out of a deal entirely.
The newest report from Sports Business Journal would seem to suggest that is a somewhat likely scenario. Per the report, “DAZN’s investment was kind of poo-pooed” during a call the NBA had with its 13 Main Street-associated teams last month. While each team acts individually, it wouldn’t be surprising for these teams to follow the league’s advice, looking forward towards a future where the NBA forms a centralized local rights package sold to a more established streamer.
If a large cohort of NBA teams come to that conclusion, any deal between Main Street and DAZN would be dead on arrival. That’s not even to account for the 16 MLB and NHL teams which would also be faced with decisions.
Another detail in the report would also seem to suggest the NBA teams would simply be better off allowing Main Street to shutter. Per SBJ, the 13 NBA teams “had safeguards written into their Main Street contracts that line them up to be primary payees from Main Street’s creditors should the business eventually collapse.” In other words, the 13 NBA teams will be made whole on their rights fees before any of Main Street’s other financial obligations in the event of a collapse.
Reading between the lines, there seems to simply be too many hurdles to clear for a DAZN deal to come to fruition. That doesn’t mean it couldn’t happen, but the streamer would need to convince a number of NBA teams that may already be predisposed towards axing a deal that it’d actually be in their best interest to sign on, all while paying them rights fees below what their current contracts lay out. In other words, it will be a very uphill battle for any deal to cross the finish line.
More likely, Main Street will shutter either at the end of the current NBA and NHL seasons, or before then in a “worst-case scenario.” In this case, the 29 Main Street teams across the three leagues will weigh other options, be that a combination over-the-air plus streaming strategy as some teams have done, joining another regional sports network, or linking up with league-controlled media outfits.