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The appeal of regional sports networks

The top 10 most expensive cable affiliate fees in the U.S. last year were all sports channels — mostly regional sports networks (RSNs) — with ESPN being by far the most expensive, per SNL Kagan data provided to Axios.

Adapted from Kagan, a group within S&P Global Market Intelligence; Chart: Axios Visuals

The big picture: They're expensive because the bulk of their content comes from licensing sports rights, which as noted above, are getting more expensive.

So why would Amazon want to get into such a business?

  1. To bolster Prime membership: Per The New York Times' Edmund Lee: "At a time when pay TV is in decline, sports content drives viewership across platforms. Owning rights to big franchises would help Amazon market its Prime program (which costs $119 a year), especially if that membership included access to those games. That, in turn, could add more revenue, as Prime members tend to buy more on Amazon."
  2. It's easier than going directly to the sports leagues: Per BTIG Managing Director and Media Analyst Rich Greenfield in a note to clients: "While ultimately tech platforms could simply buy local rights directly from leagues/owners, the quickest way to enter the local/regional sports licensing game could be through the acquisition of RSNs."
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