Altitude considering options with Amazon, Youtube
A harmonious, 15-year partnership probably wasn’t going to end without rancor.
The ongoing carriage dispute between Altitude Sports and its big three distributors — Comcast, Directv and Dish — is a microcosm of the problems plaguing regional sports networks across the country.
Locally, it’s taken Altitude off the air for more than a week as the former partners have been unable to reach an agreement. Nationally, the marriage between regional sports networks and distributors faces a murky future.
Broadcast rights fees for teams have escalated, placing more of a financial burden on networks. In turn, networks, such as the Kroenke-owned Altitude, have demanded higher carriage costs from the distributors. Now, with cord-cutters taking their money elsewhere, cable and satellite distributors have balked at renewing contracts.
The impasse between Altitude and its big three distributors is indicative of a model in turmoil, if not one that’s broken altogether.
With little leverage in nowstalled negotiations, Altitude executives are looking at other options to televise Nuggets, Avalanche and their other teams’ games, rather than acquiesce to distributors who want to dramatically lower carriage costs, citing declining viewership.
One possible solution? A partnership with Amazon.
“We are exploring it,” KSE president/ceo Jim Martin said. “How viable it is and what their level of interest is, we don’t know at this point, but we are interested in looking into that. We’ve had no direct conversations with them, but we have been looking internally
about what the opportunity would be and we do intend to reach out to them.”
Added Altitude executive vice president Kenny Miller: “You look at what you could do with Amazon, ‘You’re like, man is that intriguing.’ ”
The YES Network, which airs the New York Yankees, was recently sold to a group including Sinclair Broadcasting Group, Yankees Global Enterprises and Amazon. Partnering with Amazon is something sports network executives are looking at due to the potential for streaming capability.
On Tuesday, Altitude released a statement that doused cold water on the streaming option, claiming “today a model does not exist that can support a streaming/direct to consumer option.” But a partnership with Amazon similar to what YES just agreed to? Possibly.
“If you’ve looked at our response regarding the streaming questions, we still are of the belief that there is not a financial model there that works,” Martin said. “Maybe there is with one of the new players and we would like to explore that.”
The current state of negotiations between Altitude Sports and The Big Three — Comcast, Directv and Dish — isn’t encouraging for fans upset they won’t be able to watch the Avalanche or Nuggets, or other local programming.
The two sides remain far apart, with Altitude proposing a slight decrease in annual carriage rates and the distributors insisting on cutting their fees in half. As if cutting rates from 50 to 60% wasn’t jarring enough for the executives at Kroenke Sports and Entertainment, the distributors also want to elevate Altitude to a sports tier package and charge customers more than they already are to view Nuggets, Avalanche and Rapids games.
“No other regional network is being asked to do what we’re being asked to do,” Martin said.
Despite an aggressive social media campaign to steer public opinion in favor of Kroenke’s regional sports network, the distributors haven’t budged. With less than a month before the Avalanche’s regular season begins, the dispute is all about leverage.
Altitude’s best leverage is that it owns the broadcasting rights to two teams with playoff aspirations. The ratings, one would expect, would be good.
Last year, Nuggets average viewership jumped 74% in comparison to the 201718 season while viewership for the Avalanche rose 49% compared to the previous season.
What is happening in Los Angeles offers another potential roadmap for how Altitude might negotiate.
The Dodgers own the network Sportsnet LA. They’ve also made the postseason the last six years and have the best record in the National League this year.
Due to an $8 billion dollar agreement with the franchise, only Time Warner Cable (and now Charter Communications) customers are able to watch them mow down the NL West. Anyone in Los Angeles with Directv or another provider hasn’t been able to watch.
“One of the new players,” as Martin referred to them, could be an option.
Youtube reached an agreement with MLB to broadcast 13 games this season exclusively on its platform, including three Dodgers games. One, on July 18, registered 2.16 million views, according to Youtube.
Is Youtube a viable partner? What about another streaming service such as Twitter, Facebook or Hulu? Big tech companies have been testing the waters on live sports for several years.
Financially, the barrier to entry is minuscule compared to what it used to be for the traditional distributors.
The upheaval in the regional sports network business is apparent everywhere you turn. Sinclair, which was involved in the YES purchase, recently bought 21 regional sports networks (formerly owned by FOX) from Disney. Sinclair paid $9.6 billion — half of the bundle’s projected value.
“The big thing in all of this is Sinclair,” Miller said. “FOX Sports has always been the 800-pound gorilla with 21 regions. And so, most everything was based off of that. They have a lot of leverage. … It’s not business as usual when these things have come up now because the whole world has changed.”
AT&T (and Directv) is considering selling its regional sports networks, according to Bloomberg, which could impact Colorado Rockies broadcasts. Distributors are fed up with rising costs, networks find themselves at a crossroads, and sports fans, accustomed to broadcasts of their favorite teams, are caught in the cross hairs.
“Altitude may be ground zero for these entities looking at it, like ‘OK, we’re going to make a stand on the regional sports network that has all their affiliate deals up at the same time and just see what happens,’ ” Miller said.