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Nikola Jokic #15 of the Denver Nuggets shoots the ball during the game against the San Antonio Spurs during Game Five of Round One of the 2019 NBA Playoffs on April 23, 2019 at the Pepsi Center in Denver, Colorado.
Bart Young | National Basketball Association | Getty Images

Jackson Wieger has been a Denver sports fanatic for 20 years. He loves the Nuggets, who are led by reigning NBA most valuable player Nikola Jokic, and grew up watching the NHL’s Colorado Avalanche.

“Both the Nuggets and the Avalanche play 82 games, and I’d say I used to watch 65 games a year,” said Wieger, 27, who lives in Lakewood, Colorado, just outside of Denver.

Two years ago, his fandom was crushed. Comcast stopped carrying Altitude Sports, the regional network that owns broadcast rights for both teams, because the two sides couldn’t reach a carriage agreement. Comcast said at the time that more than 95% of its customers watched the equivalent of less than one game per week.

Wieger was in the 5%, along with many people he knows. Sports for them are different now.

“My friends and family used to be so passionate, but now that you can’t watch, you’re not as in tune with what’s going on,” Wieger said. “You’re not as excited. You’re not as engaged.”

The local sports saga is playing out in markets across the U.S. as cable and satellite TV companies abandon regional sports networks, or RSNs. Rather than accept large monthly subscription fees, pay-TV providers like Comcast, DirecTV and Dish, and digital providers such as YouTube TV and Hulu, are increasingly walking away to keep costs down.

They’ve decided the amount they have to pay to keep RSNs in the bundle no longer makes economic sense, given how few people watch them and how much they charge.

Other than ESPN, RSNs are the most expensive networks in the bundle. Many charge more than $5 per month per subscriber, according to research firm Kagan, a subdivision of S&P Global. Cable bills have to rise to support the added cost, which leads to more cancellations.

Since 2012, about 25 million U.S. households have cut the cord on traditional pay-TV. Media executives expect subscriber numbers to fall by another 15 million to 25 million by the end of 2025. Meanwhile, monthly bills continue to go up.

The result is a lot unhappiness. Fans are shut out. RSNs are bleeding money. Teams and leagues are losing their most valuable asset: their audience.

A potential escape from the vicious cycle is subscription streaming, where media and entertainment companies are focusing their attention. That push accelerated during the pandemic as consumers looked for ways to cut costs and, for several months, had no live sports to watch while stuck at home.

But RSNs haven’t yet figured out a streaming solution, and professional sports leagues are starting to consider their future options.

“As an investor, I would short RSNs,” said Leo Hindery, former CEO of New York’s YES Network who now works in private equity and recently formed two special purpose acquisition companies. YES broadcasts New York Yankees baseball games and Brooklyn Nets basketball games. “The cost of sports is the main reason people are cutting the cord on cable. We’re learning to live without sports,” Hindery said.

The plight of Sinclair

Chris Ripley, CEO of Sinclair Broadcast Group, is feeling the pain. Sinclair is the majority owner of 21 RSNs, more than any other company. Its networks broadcast live sports from 43 teams across Major League Baseball, the National Basketball Association and the National Hockey League.

Sinclair acquired the RSNs for about $10 billion in 2019 after Disney purchased the majority of 21st Century Fox and divested the sports networks. The deal shocked the business world, because Sinclair owns nearly 200 local broadcast affiliate stations across the U.S. but wasn’t in the RSN business at all before the transaction.

With a market cap below $4 billion, Sinclair had to borrow $8 billion to do the deal using a separate entity called Diamond Sports, and also tapped Byron Allen’s Entertainment Studios for some financing help.

“I’ve always thought that consolidation of the rest of the industry makes sense,” Ripley said earlier this month during his company’s third quarter earnings conference call.

Ripley’s dream of an industry-wide rollup would also amount to a bailout of his investment. While Sinclair shares initially soared 35% on news of the deal and briefly topped $60, the stock has since plunged by more than half to around $24. Its market cap has fallen below $$2 billion, and bonds for Diamond Sports have plummeted.

Last year, less than 15 months after closing the acquisition of its RSN portfolio, Sinclair wrote down the value of the assets by $4.23 billion.

In expanding into regional sports, Sinclair bet that airing local games would continue to command high pay-TV carriage fees because passionate fans of MLB, NBA and NHL teams have no other way to watch on days when there’s no national broadcast.

Sinclair was also angling to tie future RSN negotiations with the company’s other networks, which are affiliates of ABC, NBC, CBS and Fox — channels that customers would loathe losing. Nearly 85% of Sinclair’s RSN revenue comes from pay-TV subscriptions.

During the two-plus years since Sinclair dove into the RSN market, the company’s rationale has been undermined by two major events.

First was the pandemic.

The other was the decision by Dish to stop carrying Sinclair’s networks. Dish dropped the 21 RSNs in July 2019, a month before Sinclair closed its transaction. Dish, the fourth-largest U.S. pay-TV provider, has about 11 million subscribers nationwide between its satellite TV product and digital Sling TV, and some of them live in Sinclair territories.

Dish’s Charles Ergen
Andrew Harrer | Bloomberg | Getty Images

Dish’s decision to move away from RSNs goes beyond Sinclair. Dish dropped Comcast’s NBC Sports RSNs in Apriland AT&T’s RSNs in September. In Denver, near where Dish is headquartered, the company doesn’t carry Altitude Sports, the network that’s home to the Nuggets and Avalanche. Both teams are controlled by Altitude owner Stan Kroenke.

Altitude says on its website that Comcast and Dish “continue to ignore the wishes of their customers and our fans” and “have demonstrated a level of greed that is clearly out of touch.”

Dish’s billionaire founder and chairman Charlie Ergen refuses to budge. On the company’s quarterly earnings call in August, Ergen described RSNs as a tax on subscribers. When there are no live games, most of the networks air low-rated programs like sports documentaries and reruns.

“We don’t have any customers calling us on RSNs today,” Ergen told analysts. “We’re happy to talk about anything that’s creative and doesn’t harm our customers, but we’re not interested in taxing our customers when they don’t watch the channel. That doesn’t make any sense.”

‘Bundle is broken’

Even if most people don’t watch RSNs, irritating fans that do isn’t good business for sports leagues. NBA commissioner Adam Silver sounded off on the issue last month at the SBJ World Congress of Sports in New York.

“The bundle is broken,” Silver said. “It’s clearly broken. Our regional sports networks – Sinclair in particular. They paid $10 billion. It’s not clear it’s a good deal at $5 billion.”

Silver’s concern is shared by many in the industry.

Comcast’s NBCUniversal owns seven RSNs. AT&T and Charter each own four. The rest are independently owned by a variety of companies, including Madison Square Garden, Cox Communications and sports teams.

Comcast wants to sell its RSNs. AT&T considered selling theirs before agreeing to merge WarnerMedia with Discovery earlier this year. Comcast shut down its NBC Sports Northwest RSN on Sept. 30, after losing the broadcast rights to air games from the NBA’s Portland Trail Blazers.

Signage stands outside the Sinclair Broadcast Group Inc. headquarters in Cockeysville, Maryland, U.S., on Friday, Aug. 10, 2018. 
Andrew Harrer | Bloomberg | Getty Images

As the RSN industry reckons with an existential threat, the potential downstream effects have America’s major sports franchises justifiably on edge. RSNs provide billions of dollars to sports leagues, which use the revenue as one way to pay player salaries and invest in the organization.

There’s also the future of fandom. If fewer people are exposed to local sports because they’re no longer available on their bundle and consumers can’t find them outside of pay TV, younger audiences may have little interest in going to games or buying hats and jerseys.

Warnings signs are already present. Research shows that younger Americans are far less likely than their parents to watch live sports.

“Forget the actual teams and regional sports networks, it’s not going to be good for the sport or the leagues,” said Michael Schreiber, CEO of Playfly Sports, a sports marketing and media company. “The trick is maintaining high exposure of live games across the U.S. at the same time as creating new, innovative ways to access the content.”

Sinclair’s near-term plan is to build a direct-to-consumer subscription service, allowing local fans to get streaming access to games outside of the cable bundle. The company laid out its streaming strategy in an SEC filing in July.

In the document, Sinclair predicted that allowing fans to watch their hometown teams over the internet could “potentially generate $2 billion+ in annual revenue” with an estimated 4.4 million subscribers by 2027. The filing hints at opportunities in sports betting, fantasy and non-fungible tokens, all hot topics that may or may not produce actual revenue. Sinclair rebranded its RSNs using the Bally’s casino name earlier this year to more closely align the networks with gambling.

The biggest obstacle for a streaming service is affordability. Based on contracts with pay-TV operators, Sinclair would be forced to charge much more for a direct-to-consumer product than the amount that Comcast, DirecTV and Dish pay the company. One industry insider told CNBC the typical rate for a consumer would be five times higher.

In other words, if a cable company pays $4 per month per subscriber to Sinclair for one of its regional sports networks, Sinclair would have to charge at least $20 per month for the same content to be streamed directly to a user.

Julius Randle #30 of the New York Knicks drives to the basket against the Atlanta Hawks during Round 1, Game 5 of the 2021 NBA Playoffs on June 2, 2021 at Madison Square Garden in New York City, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images

The New York Post reported in June that Sinclair was considering a $23 monthly offering to stream games in markets where it owns digital rights, though Sinclair hasn’t confirmed the figure. By comparison, Netflix and HBO Max cost about $15 per month, and the combined package of Disney+, Hulu and ESPN+ costs $13.99 per month. Sinclair declined to comment on the pricing it’s considering for its streaming service, which will debut next year.

The risk to Sinclair, beyond just the high price, is that a streaming play could make it even easier for pay-TV distributors to cut its networks from the bundle. As Ergen points out, if content is no longer exclusive to the bundle, it’s also not as essential.

Last month, Comcast dropped MSG Network from its Xfinity channel lineup, claiming that viewership was “virtually non-existent.” MSG and its sister networks, MSG2 and MSG Plus 2, show live games from the NBA’s New York Knicks and the NHL’s New York Rangers, New York Islanders and New Jersey Devils. Comcast serves New Jersey and Connecticut but not New York City.

“We don’t believe that our customers should have to pay the millions of dollars in fees that MSG is demanding for some of the most expensive sports content in the country with extremely low viewership in our markets,” Comcast said in a statement. “Almost 95% of all customers who received MSG over the past year did not watch more than 10 of the approximately 240 games it broadcast.”

Sinclair isn’t faring any better with digital distributors. YouTube TV, Hulu with Live Sports and even sports-focused FuboTV have chosen not to carry the RSNs in their bundles, which start at $65 a month.

Complicating matters further, Sinclair hasn’t actually secured streaming rights for most of the teams on its RSNs.

MLB allows each team to negotiate separately for its media rights. The NBA and NHL own digital rights for all of their teams. So far, Sinclair has direct-to-consumer streaming rights for four MLB teams and is in talks with the NBA and NHL to stream outside of the cable bundle.

MLB Commissioner Rob Manfred
Steven Ferdman | Getty Images

Ripley is confident he’ll get what he needs because Sinclair holds what’s in essence a block function on digital rights. That means it would be financially punitive for the leagues to circumvent Sinclair without the company’s participation.

Whether Sinclair can afford to participate is another matter.

“We’ve been very clear with [Sinclair] from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we’re not just going to throw them in to help Sinclair out,” MLB Commissioner Rob Manfred said last month during the CAA World Congress of Sports. He went on to say that cord cutting is one problem, but there’s also “excessive leverage” in Sinclair’s Diamond subsidiary.

Can RSNs survive?

Creating a unified entity that controls all RSNs is an ideal way forward for the major sports leagues as they adapt to the digital era. They could sell multi-team packages to local fans. They could allow individuals to pick and choose different teams across different sports and subscribe to just those games.

While MLB and the NBA already have out-of-market national streaming options — MLB TV and NBA League Pass — blackout restrictions prevent the packages from including local teams. The whole concept of geofencing seems antiquated at a time when nearly every other form of video content is accessible on mobile devices wherever you are.

Greg Maffei, CEO of Atlanta Braves owner Liberty Media, told CNBC earlier this week there will be plenty of ways to get games to fans outside of using RSNs.

“You’ll see a host of new alternatives, whether it be offerings provided by MLB, whether it be over-the-top offerings or whether it be a more a la carte model over traditional linear television,” Maffei said. “Those will proliferate.”

MLB’s Manfred said that digital rights “are very valuable and crucial to our future,” but “who exactly the partners will be I’m not prepared to dismiss or not dismiss.”

Team owners are acclimating to a possible future without RSNs. Some hope that large technology companies, such as Amazon, could acquire streaming rights, potentially through partnerships with existing RSNs. Amazon already owns a minority stake in the YES Network and streamed 21 Yankees games to New York-area Prime users this year.

Comcast could also choose to include local games in Peacock, NBCUniversal’s streaming service.

“The revenue that comes from people enjoying our games who are not in the stadium, I don’t think that is going to bust,” said Steve Ballmer, owner of the NBA’s Los Angeles Clippers and former Microsoft CEO, in an interview. “How we get that revenue, there’s a lot of open questions. Will they be big media contracts from people who are on cable in broadcast TV? Will the players change, and companies like Amazon, Apple and the streaming guys want to come into the game, as opposed to just ESPN and Turner? Will there be some direct-to-consumer offer by the league, which is certainly a possibility? There’s a lot to be figured out.”

According to a New York Post story last month, MLB, the NBA and the NHL have considered launching a streaming service together that circumvents the need for RSNs. Sinclair would have to either forego its block provision or work with the league to be part of the streaming solution.

Sinclair knows leagues and teams desperately want a direct-to-consumer strategy. Cord-cutters abound and RSNs are reaching fewer people in the pay-TV ecosystem. But RSNs still generate billions in cash for the leagues each year, and Sinclair sees some leverage in that position.

“I tend to think that RSNs aren’t going to go away,” said Ed Desser, president of Desser Media, a consultancy firm that advises the sports television industry. However, they have to evolve to meet the realities of the market, he said.

“It’s been one-size-fits-all for many years,” Desser said. “I would expect that will change.”

(Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC).

–CNBC’s Jabari Young contributed to this report.

WATCH: Sinclair Broadcasting and Bally’s team up

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OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit

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OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit

OpenAI CEO Sam Altman visits “Making Money With Charles Payne” at Fox Business Network Studios in New York on Dec. 4, 2024.

Mike Coppola | Getty Images

OpenAI CEO Sam Altman’s sister, Ann Altman, filed a lawsuit on Monday, alleging that her brother sexually abused her regularly between the years of 1997 and 2006.

The lawsuit, which was filed in U.S. District Court in the Eastern District of Missouri, alleges that the abuse took place at the family’s home in Clayton, Missouri, and began when Ann, who goes by Annie, was three and Sam was 12. The filing claims that the abusive activities took place “several times per week,” beginning with oral sex and later involving penetration.

The lawsuit claims that “as a direct and proximate result of the foregoing acts of sexual assault,” the plaintiff has experienced “severe emotional distress, mental anguish, and depression, which is expected to continue into the future.”

The younger Altman has publicly made similar sexual assault allegations against her brother in the past on platforms like X, but this is the first time she’s taken him to court. She’s being represented by Ryan Mahoney, whose Illinois-based firm specializes in matters including sexual assault and harassment.

The lawsuit requests a jury trial and damages in excess of $75,000.

In a joint statement on X with his mother, Connie, and his brothers Jack and Max, Sam Altman denied the allegations.

“Annie has made deeply hurtful and entirely untrue claims about our family, and especially Sam,” the statement said. “We’ve chosen not to respond publicly, out of respect for her privacy and our own. However, she has now taken legal action against Sam, and we feel we have no choice but to address this.”

Their response says “all of these claims are utterly untrue,” adding that “this situation causes immense pain to our entire family.” They said that Ann Altman faces “mental health challenges” and “refuses conventional treatment and lashes out at family members who are genuinely trying to help.”

Sam Altman has gained international prominence since OpenAI’s debut of the artificial intelligence chatbot ChatGPT in November 2022. Backed by Microsoft, the company was most recently valued at $157 billion, with funding coming from Thrive Capital, chipmaker Nvidia, SoftBank and others.

Altman was briefly ousted from the CEO role by OpenAI’s board in November 2023, but was quickly reinstated due to pressure from investors and employees.

This isn’t the only lawsuit the tech exec faces.

In March, Tesla and SpaceX CEO Elon Musk sued OpenAI and co-founders Altman and Greg Brockman, alleging breach of contract and fiduciary duty. Musk, who now runs a competing AI startup, xAI, was a co-founder of OpenAI when it began as a nonprofit in 2015. Musk left the board in 2018 and has publicly criticized OpenAI for allegedly abandoning its original mission.

Musk is suing to keep OpenAI from turning into a for-profit company. In June, Musk withdrew the original complaint filed in a San Francisco state court and later refiled in federal court. 

Last month, OpenAI clapped back against Musk, claiming in a blog post that in 2017 Musk “not only wanted, but actually created, a for-profit” to serve as the company’s proposed new structure.

WATCH: OpenAI unveils for-profit plans

OpenAI unveils for-profit plans

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Meta employees criticize Zuckerberg decisions to end fact-checking, add Dana White to board

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Meta employees criticize Zuckerberg decisions to end fact-checking, add Dana White to board

This photo illustration created on January 7, 2025, in Washington, DC, shows an image of Mark Zuckerberg, CEO of Meta, and an image of the Meta logo. 

Drew Angerer | Afp | Getty Images

Meta employees took to their internal forum on Tuesday, criticizing the company’s decision to end third-party fact-checking on its services two weeks before President-elect Donald Trump’s inauguration.

Company employees voiced their concern after Joel Kaplan, Meta’s new chief global affairs officer and former White House deputy chief of staff under former President George W. Bush, announced the content policy changes on Workplace, the in-house communications tool. 

“We’re optimistic that these changes help us return to that fundamental commitment to free expression,” Kaplan wrote in the post, which was reviewed by CNBC. 

The content policy announcement follows a string of decisions that appear targeted to appease the incoming administration. On Monday, Meta added new members to its board, including UFC CEO Dana White, a longtime friend of Trump, and the company confirmed last month that it was contributing $1 million to Trump’s inauguration.

Among the latest changes, Kaplan announced that Meta will scrap its fact-checking program and shift to a user-generated system like X’s Community Notes. Kaplan, who took over his new role last week, also said that Meta will lift restrictions on certain topics and focus its enforcement on illegal and high-severity violations while giving users “a more personalized approach to political content.”

One worker wrote they were “extremely concerned” about the decision, saying it appears Meta is “sending a bigger, stronger message to people that facts no longer matter, and conflating that with a victory for free speech.”

Another employee commented that by “simply absolving ourselves from the duty to at least try to create a safe and respective platform is a really sad direction to take.” Other comments expressed concern about the impact the policy change could have on the discourse around topics like immigration, gender identity and gender, which, according to one employee, could result in an “influx of racist and transphobic content.”

A separate employee said they were scared that “we’re entering into really dangerous territory by paving the way for the further spread of misinformation.”

The changes weren’t universally criticized, as some Meta workers congratulated the company’s decision to end third-party fact checking. One wrote that X’s Community Notes feature has “proven to be a much better representation of the ground truth.” 

Another employee commented that the company should “provide an accounting of the worst outcomes of the early years” that necessitated the creation of a third-party fact-checking program and whether the new policies would prevent the same type of fall out from happening again.

As part of the company’s massive layoffs in 2023, Meta also scrapped an internal fact-checking project, CNBC reported. That project would have let third-party fact checkers like the Associated Press and Reuters, in addition to credible experts, comment on flagged articles in order to verify the content.

Although Meta announced the end of its fact-checking program on Tuesday, the company had already been pulling it back. In September, a spokesperson for the AP told CNBC that the news agency’s “fact-checking agreement with Meta ended back in January” 2024. 

Dana White, CEO of the Ultimate Fighting Championship gestures as he speaks during a rally for Republican presidential nominee and former U.S. President Donald Trump at Madison Square Garden, in New York, U.S., Oct. 27, 2024.

Andrew Kelly | Reuters

After the announcement of White’s addition to the board on Monday, employees also posted criticism, questions and jokes on Workplace, according to posts reviewed by CNBC.

White, who has led UFC since 2001, became embroiled in controversy in 2023 after a video published by TMZ showed him slapping his wife at a New Year’s Eve party in Mexico. White issued a public apology, and his wife, Anne White, issued a statement to TMZ, calling it an isolated incident.

Commenters on Workplace made jokes asking whether performance reviews would now involve mixed martial arts style fights.

In addition to White, John Elkann, the CEO of Italian auto holding company Exor, was named to Meta’s board.

Some employees asked what value autos and entertainment executives could bring to Meta, and whether White’s addition reflects the company’s values. One post suggested the new board appointments would help with political alliances that could be valuable but could also change the company culture in unintended or unwanted ways.

Comments in Workplace alluding to White’s personal history were flagged and removed from the discussion, according to posts from the internal app read by CNBC.

An employee who said he was with Meta’s Internal Community Relations team, posted a reminder to Workplace about the company’s “community engagement expectations” policy, or CEE, for using the platform.

“Multiple comments have been flagged by the community for review,” the employee posted. “It’s important that we maintain a respectful work environment where people can do their best work.” 

The internal community relations team member added that “insulting, criticizing, or antagonizing our colleagues or Board members is not aligned with the CEE.”

Several workers responded to that note saying that even respectful posts, if critical, had been removed, amounting to a corporate form of censorship.

One worker said that because critical comments were being removed, the person wanted to voice support for “women and all voices.”

Meta declined to comment.

— CNBC’s Salvador Rodriguez contributed to this report.

WATCH: Meta adds Dana White, John Elkann, and Charlie Songhurst to board of directors.

Meta adds Dana White, John Elkann, and Charlie Songhurst to board of directors

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Bitcoin drops below $98,000 as Treasury yields pressure risk assets

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Bitcoin drops below ,000 as Treasury yields pressure risk assets

Nicolas Economou | Nurphoto | Getty Images

Bitcoin slumped on Tuesday as a spike in Treasury yields weighed on risk assets broadly.

The price of the flagship cryptocurrency was last lower by 4.8% at $97,183.80, according to Coin Metrics. The broader market of cryptocurrencies, as measured by the CoinDesk 20 index, dropped more than 5%.

Crypto stocks Coinbase and MicroStrategy fell more than 7% and 9%, respectively. Bitcoin miners Mara Holdings and Core Scientific were down about 5% each.

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Bitcoin drops below $98,000

The moves followed a sudden increase in the 10-year U.S. Treasury yield after data released by the Institute for Supply Management reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation. Rising yields tend to pressure growth oriented risk assets.

Bitcoin traded above $102,000 on Monday and is widely expected to about double this year from that level. Investors are hopeful that clearer regulation will support digital asset prices and in turn benefit stocks like Coinbase and Robinhood.

However, uncertainty about the path of Federal Reserve interest rate cuts could put bumps in the road for crypto prices. In December, the central bank signaled that although it was cutting rates a third time, it may do fewer rate cuts in 2025 than investors had anticipated. Historically, rate cuts have had a positive effect on bitcoin price while hikes have had a negative impact.

Bitcoin is up more than 3% since the start of the year. It posted a 120% gain for 2024.

Don’t miss these cryptocurrency insights from CNBC Pro:

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