LITIGATION TRENDS 2025 | 127 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C The Fall of Traditional RSNs and the Rise of Direct-to-Consumer Throughout 2024, one major media trend persisted: cord-cutting. Consumers continue to move away from traditional cable television, and towards the streaming ecosystem, to consume content. But while viewers increasingly prefer to watch shows on-demand, sports remains the last frontier of live content. Securing live sports rights can generate gamechanging revenues for those television networks and streaming services that can afford them, although these rights have also been a source of hotly contested litigation because of the significant investment these rights command. We expect that this trend will continue into 2025 as consumer viewing habits and the ever-increasing value of live sports rights remain a key business driver in the industry. One primary effect of the recent changes in the television industry is the downward trajectory of the regional sports network infrastructure, and the need for leagues, and individual teams, to fill this void. In 2019, Sinclair purchased Fox’s RSNs and launched Diamond Sports Group with plans to leverage these networks to secure increased distribution fees. However, Diamond underestimated the emergence of “over-the-top” streaming as a preference for sports fans, and subsequently filed for bankruptcy. The Diamond bankruptcy was hotly contested, and resulted in significant collateral litigation between and among Diamond, Sinclair, and the various sports leagues – most notably Major League Baseball – over Diamond’s use of the bankruptcy process to cancel and heavily renegotiate certain agreements with its team partners. As part of the reorganization plan approved in November 2024, Diamond terminated their broadcasting agreements with nearly a dozen teams, which left these teams without a local television home with little notice. To solve this problem, teams started taking matters into their own hands. The Portland Trailblazers, for example, announced a two-pronged approach to their post-RSN future. First, the team created Rip City Television Network, a free over-the-air network that airs Trailblazers games. The team also launched BlazerVision, a paid, directto-consumer streaming platform for those fans without traditional television connections. Similarly, the Arizona Coyotes and Phoenix Suns partnered with local over-the-air networks to distribute their home games in the Phoenix-metropolitan area. Diamond’s bankruptcy was just one example of this rapid RSN decline. The Houston Astros, Houston Rockets, and Comcast had partnered to create Comcast SportsNet Houston. But the network struggled to achieve widespread distribution throughout Houston as carriers pushed back against their desired distribution fee. As the network – partially owned by the Astros and Rockets – struggled, the teams threatened to revoke their license agreements. Comcast SportsNet Houston ultimately filed for bankruptcy, and litigation ensued over the balance of the $100 million loan Comcast made to assist in starting the network. As the RSN model continues to deteriorate, RSNs will likely look to restructure or modify their agreements with the teams whose rights they have acquired, likely leading to more litigation in 2025. Antitrust Litigation The evolving sports media landscape has also spurred high-stakes antitrust litigation. After a month-long trial, the jury in In re Nat’l Football League Sunday Ticket Antitrust Litigation returned a $4.7 billion verdict against the NFL, finding that the pooling of teams’ out-of-market broadcasts rights, and providing an exclusive license to DirecTV’s Sunday Ticket, was anticompetitive. However, the judge later vacated the verdict, reasoning that the Plaintiffs’ damages theory was flawed. The plaintiffs have appealed the case to the Ninth Circuit, which may rule in late 2025. The ultimate outcome of this case has the potential to drastically alter the S T CROSS-PRACTICE FOCUS Sports 126 | Weil, Gotshal & Manges LLP
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