The Phoenix Suns have signed a new local media deal that entirely abandons the RSN cable model that has driven NBA teams for the past two decades. In doing so, they are also the first franchise to formally leave the Diamond Sports family following its bankruptcy.
Future Suns and Phoenix Mercury games will be available in Arizona via a pair of over-the-air Gray Television channels and a team-branded digital service powered by streaming provider Kiswe. The three-way deal is the first in what could be a slew of new local media partnerships, as the once-lucrative RSN model crumbles for many NBA, NHL and MLB franchises.
New Suns owner Mat Ishbia is choosing reach over upfront payments in the dilemma faced by nearly all sports leagues and teams negotiating modern media deals. Under the new setup, Suns and Mercury broadcasts will be available to nearly 2.8 million households in Arizona, more than triple the reach via the team’s current partnership with Diamond’s Bally Sports Arizona. They will also be free, without the need for a cable subscription.
Diamond said in a statement Friday morning that this new local deal broke its contract with the Suns, and it’s a violation of bankruptcy law. The group said it would “pursue all remedies against any parties that attempt to exercise control over our property interests while we reorganize. This is an improper effort by the Suns to change their broadcasting partner without permitting Diamond to exercise our contractual rights.”
Josh Bartelstein, CEO of the Suns and Mercury, said in a statement, “Diamond’s position is totally inaccurate. We are moving forward with this deal.”
Financially, the team is moving from set payments in the Diamond RSN deal to a model that includes a smaller annual fee and a split of advertising sales. Pricing for the streaming service has not yet been determined. Representatives for the Suns and Gray Television declined to comment on the specific financial details.
“One thing I know to be true is, if you do right by your customers, the money will follow,” Ishbia said in an email. “If we build an incredible product and put our fans first, we will be successful beyond our wildest ambitions. That’s my philosophy, and it is true 100% of the time.”
Suns and Mercury games that aren’t part of exclusive national windows will be broadcast between Gray Television’s KTVK and KPHE over-the-air channels. That includes a minimum of 70 Suns games each season. The NBA team’s TV deal runs five years; the WNBA team’s runs two years.
This model is new in the modern NBA, where all 30 teams had RSN deals this past season. Those deals historically paid teams a hefty annual sum—the Suns’ deal was likely in the $25 million range, according to Sportico’s estimates—but the model is undergoing dramatic shifts as more and more users turn their backs on cable.
The Diamond Sports networks, which were sold in 2019 for $9.6 billion, declared bankruptcy in March, and it’s unclear how much of their contractual payments will be made to teams moving forward. Though RSNs remain a very lucrative set-up for some sports teams (like the large-market Yankees, Knicks and Cubs), others are exploring new possibilities for their local rights.
“At the end of the day, what local viewers watch in patterns is local news and local sports,” Gray Television CEO Pat LaPlatney said in a telephone interview. “To get back into the local sports business, that’s huge for us.”
Suns games have been broadcast on Bally Sports Arizona since the 2003-04 season, when the network was owned by Fox. That relationship, exclusive since 2011, expired at the end of this past regular season, according to multiple people familiar with the contract. Suns games this season averaged 32,692 households per game in the Phoenix area, eighth-highest among RSNs, according to Sportico’s data. The network, which also carries Arizona Coyotes and Diamondbacks games, has a carriage fee of $6.29 per month, making it the fourth most expensive RSN in the country.
The Suns also have some structural advantages that make it easier to transition to this new model. Both the NBA and WNBA teams have an in-house broadcast team that produces pregame, in-game, halftime and post-game shows for both home and away games. The Suns’ partnership team also handles the commercial sales for the broadcasts. The team will continue to handle production next season, LaPlatney said, and will share ad sales duties with Gray.
More details about the digital offering will be announced in the coming months. Some RSNs, including the Bally’s family, have launched digital offerings in past two years, but they’re typically done in concert with a team’s cable partner. The Suns- and Mercury-branded digital offering will include an app making game available on phones and Smart TVs. The Mercury games this upcoming season will be free.
Ishbia purchased a controlling stake in the Suns last year in a deal that valued the team at $4 billion, a record for an NBA team in a majority sale. Ishbia wasted little time shaking things up—less than a week after the deal closed, he traded for NBA superstar Kevin Durant. The team is currently in the second round of the NBA playoffs.
Ishbia said in an email that the challenges facing RSNs were not the main motivation for this deal.
“The math for me is simple: how do I give as many people as possible access to our games,” he said. “It makes no sense to have the best NBA and WNBA teams in the league and people can’t watch their games because of a blackout or they don’t want to pay for cable.”
LHB Sports, Entertainment & Media advised Kiswe and Gray Television in the transaction. Endeavor and WME Sports advised the Suns.
(This story has been updated to include the statement from Diamond Sports.)
With assistance from Anthony Crupi and Kurt Badenhausen.