AT&T Sportsnet Terminates Penguins Rights, Bankruptcy Threatens

The Pittsburgh Penguins and Pittsburgh Pirates may have a problem. AT&T Sportsnet, which broadcasts its games through local and regional cable systems, is teetering on the brink of bankruptcy and exiting the local sports business.

And it could come at the worst possible time for Penguins fans as the NHL season approaches a climax.

According to a report in the Wall Street Journal, Warner Bros. Discovery will cease participating in the regional sportsnet network business on March 31 and will not make future payments to rights holders.

Cable cutting and the lack of streaming by RSNs (Regional Sports Networks) have crippled the business model. According to the letter obtained by the Wall Street Journal, sent by unit president John Crumb to the four affected networks in Pittsburgh, Houston, Colorado and Utah, Warner Bro. Discovery will not cover the shortcomings of the RSN division.

The letter proposed that the networks transfer control of TV rights and programming to the teams without a purchase price to prevent future claims by the teams against the networks.

The letter also states chapter 7 liquidation bankruptcy is possible if agreements cannot be worked out by 31 March at the latest.

In other words, the network hopes to return the rights and offer control of AT&T Sportsnet Pittsburgh to the teams in exchange for not suing. If the Penguins and Pirates refuse or cannot come to an agreement, AT&T Sportsnet could be dissolved and assets sold.

WSJ also reported that the media properties were not a priority for WBD, which has been trying to divest them for some time. The parent company struggles with heavy debt and a struggling TV and streaming business.

Last week, MLB commissioner Rob Manfred said baseball would take over broadcasting in the market if Sinclair owned Diamond Sports Group, which operates the Bally’s Sports Networks, went out of business. However, NHL Commissioner Gary Bettman has yet to make a public comment.

AT&T previously owned the networks and WBD acquired them when it took control of WarnerMediaAssets. AT&T Sportsnet typically hosts most, if not all, of the Pittsburgh Penguins regular season games and the first round of the playoffs.

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