Shortly after MLB’s Opening Day on Thursday, Yankees and Cubs fans using Comcast’s Xfinity service may find themselves unable to access their teams’ games. The second-largest multichannel video programming distributor in the U.S. is in negotiations with Sinclair Broadcast Group, with a deadline set for midnight Friday. Notably, Alex Sherman pointed out in his CNBC Sport newsletter that there is a considerable chance one or both of these regional sports networks, particularly YES, could go dark on Xfinity. Here’s an excerpt from that analysis:
“Comcast subscribers who are Cubs and Yankees fans may be in for a rude awakening. Both the YES Network and Marquee Sports Network are in danger of losing carriage at midnight Friday, although sources indicate that a deal with Marquee is likely to happen. Sinclair Broadcast Group handles the distribution for both networks, and Comcast’s agreement with Sinclair is expiring.”
“Comcast has been aggressively tiering RSNs, removing them from the standard cable bundle. YES Network isn’t keen on this approach, especially since SNY (the Mets RSN, partially owned by Comcast) remains on basic cable. Of course, YES is available directly to consumers, while SNY isn’t.”
“While it’s possible that Comcast reaches a deal with all of Sinclair Broadcast Group, including Marquee, it may not include YES Network.”
The potential conflict between Comcast and YES Network has been discussed previously, with New York Governor Kathy Hochul even urging both parties to come to an agreement in a statement on Monday. However, this Friday deadline is new; Hochul’s release indicated that a prior extension would expire Tuesday, and Sportico’s Anthony Crupi previously reported that another extension was due to expire at midnight Wednesday. Some level of agreement must have occurred in the meantime, as YES remains available on Comcast systems for now. Nonetheless, Sherman’s newsletter commentary is significant as it highlights the impending Friday deadline and suggests that Sinclair might negotiate a deal excluding YES, which has a unique situation given its ownership stakes and the popularity of the Yankees.
While Sinclair manages the distribution for YES, it does not hold a significant ownership stake, unlike Marquee, a 50-50 joint venture with the Cubs. YES was launched in 2002 after a protracted legal dispute with Cablevision and MSG, with the YankeeNets company (now YankeeGlobal Enterprises) owning a 60 percent stake. Following various transactions, the current ownership structure has the Yankees holding 26.5 percent, Main Street Sports 20 percent, and Amazon 15 percent, with other investors holding the remainder. The stake held by Main Street Sports, formerly known as Diamond Sports, warrants particular attention as it is now largely creditor-owned after its bankruptcy, which complicates Sinclair’s position for negotiations with Comcast.
Furthermore, Comcast’s strategy to increase RSN tiers has been a critical aspect of recent carriage disputes. After years of criticism for shifting competitors’ RSNs to higher tiers while excluding its own, Comcast elevated its NBC Sports Regional Networks (NBC Sports Bay Area, NBC Sports California, and NBC Sports Boston) to higher tiers earlier this year. However, SNY and NBC Sports Philadelphia remain unaffected due to their ongoing multi-year deals.
If agreements between Sinclair and Comcast are not reached, the impact could be significant for both companies and Xfinity subscribers. With 12.8 million Xfinity subscribers reported at the end of Q3 last year, losing access to popular teams like the Yankees and Cubs may lead many to switch services. Furthermore, the loss of Sinclair’s content, including the Tennis Channel and local network affiliates, could compound subscriber dissatisfaction. Nonetheless, Crupi notes that during the last Comcast-YES dispute, which lasted from November 2015 to March 2017, the impact on Comcast’s daily operations was minimal, indicating that while a blackout could affect Sinclair’s revenues, Comcast’s broader business might remain stable.
There is still hope for a resolution to avoid a blackout, as previous extensions suggest ongoing negotiations. Although Comcast has been assertive in moving RSNs to higher tiers and has faced notable disputes, it has also secured several recent deals to retain or include these networks. An exception to this trend is the situation with the Bulls/Blackhawks/White Sox’s Chicago Sports Network, which is rumored to be involved in potential merger discussions with Marquee, adding further complexity to ongoing negotiations.
Regardless, both YES and Marquee provide direct-to-consumer options which could offer Xfinity subscribers a means to access games in the event of a blackout. However, the extra costs and the inconvenience of obtaining a separate subscription might alienate many viewers. Should a carriage dispute occur, the implications will be significant for Comcast, Sinclair, the networks involved, and their fans.
