Utah Jazz Hybrid Viewing Model Holds Promise for Post-RSN Future

With a hybrid media strategy that embraces both old school rabbit-ears TV and the brave new world that is streaming, the Utah Jazz have given the sports world a sneak preview of how things might shake out in a post-RSN universe. And while splitting from its legacy partnership with AT&T SportsNet Rocky Mountain effectively disconnected the NBA franchise from what had been a $35 million revenue pipeline, the early results suggest the Jazz just may be onto something here.

As the Jazz approach the five-month mark under their new over-the-air/over-the-top distribution scheme, the gains the team has made on the reach front are hard to overstate. Whereas under the RSN model, Utah’s games were disseminated to approximately 39% of the 1.15 million TV households within the bounds of the Beehive State, the jump to the Salt Lake City-based station KJZZ-TV (FWIW, that’s pronounced “K-Jazz”) has expanded the Jazz’s domain to include all in-state homes, as well as footholds in six neighboring states. As such, some 3 million homes now have access to the Jazz’s in- [and out-of-] market TV telecasts.

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Meanwhile, the franchise’s new streaming platform, Jazz+, has signed on more than 20,000 subscribers since it launched shortly before Utah tipped off its 2023-24 NBA campaign. According to Jazz president Jim Olson, the majority of those who’ve paid to access the team’s games via the app have opted for annual subscriptions of $125.50, although there are also a number of fans who pay a monthly fee of $15.50. Toss in the 1,700 or so single-game buys, which go for $5 a pop—Utah was the first NBA club to enable a la carte purchases—and the Jazz are on pace to generate in the neighborhood of $2.4 million this season on streaming alone.

Of course, the real money is still in TV, which remains the primary delivery system for live sports and all sorts of associated shoulder programming. Assuming $15 million in ad revenue, or the high end of S&P Global Market Intelligence’s projections for this season, and a nominal affiliate fee by way of KJZZ, the Jazz could generate as much as $20.8 million in distribution revenue in their first post-RSN season. While that’s shy of the estimated $35 million the team took in during its final year under the AT&T SportsNet umbrella, it’s worth noting that the last two seasons of Utah’s in-market TV deals were hashed out on a year-to-year basis. Under the 12-year, $228 million deal with the RSN that expired in 2021, the Jazz were taking in around $19 million per annum.

“We’ll go backwards a little bit this year, but we definitely have a plan to get us back to where we were with the RSNs,” Olson said Wednesday during a Zoom call with Sportico. In addition to the gains made on the ad sales front—deliveries for the season are up 53% versus the analogous period in 2022-23—the Jazz are looking to develop new revenue streams by way of content that is exclusive to the app.

“Instead of collecting one check from an RSN, we’re being creative and using a variety of opportunities to make up that difference,” Olson said. “And we do have a plan to get back to where we know we can be from the broadcast standpoint.”

Speaking of the linear-TV business, while the new distribution strategy has introduced the Jazz to such far-flung locales as southern Idaho, Wyoming and parts of Montana, the ad load remains consistent regardless of the geographical location of the end-user. At this juncture, there’s no plan to begin allowing for ad insertion in the outer markets; as such, in-game advertisers will continue to enjoy the full benefit of the team’s expanded reach, no matter how far away the viewer may be from Salt Lake City.

If Jazz+ is still a bit of a niche product—the prevalence of free over-the-air games in the state obviously eliminates some of the urgency for fans to sign up for a subscription package—the engagement figures thus far have been quite encouraging.

“For us, the question was, everyone says they want streaming, but are they actually going to use it?” said Caroline Klein, chief communications officer of the Jazz and team owner Smith Entertainment Group. “We’ve seen such a high engagement rate for active subscribers who are logging on to watch games. I think a little more than 40% of subscribers have watched more than half the games this season. And you also have 60% of subscribers who watched non-game content, too. So Jazz+ is doing its job.”

Klein also pointed out that the users who stream the live games are watching an awful lot of basketball, as the majority of those fans have been sticking around for at least three-quarters of the action thus far in the app’s relatively brief run. Meanwhile, the a la carte option is helping to draw fans into the streaming funnel as well. Klein said 10% of those who’ve made a $5 single-game purchase have converted to a monthly or annual subscription to Jazz+.

As Olson noted, the team’s new media strategy began taking shape shortly after Ryan Smith bought the Jazz for $1.66 billion in December 2020. “Ryan made it very clear to us that the RSN situation wasn’t satisfactory, because it wasn’t putting the fans first,” Olson said. In an interesting twist, the alliance with KJZZ represents a bit of a coup for nostalgia seekers, as the station previously had been owned by former Jazz owner Larry Miller back in the heyday of the Karl Malone/John Stockton era. Sinclair Broadcasting bought KJZZ in 2016, or a good seven years after Utah crossed over to the RSN side of the distribution chain.

Reuniting with their former TV home did not exact a huge logistical toll on the Jazz, as the team is one of just a handful of NBA franchises that produces its own games. Thus, the transition from AT&T SportsNet to KJZZ was practically seamless, at least for the look and feel of the games. “We’ve come full circle,” Olson said.

While the Jazz would begin planning their exit from their 13-year partnership with AT&T SportsNet just as soon as Smith’s check cleared, the RSN was already on its last legs near the end of the team’s original long-term distribution deal. After the WarnerMedia-Discovery merger was finalized in 2022, WBD began looking to offload its RSN fief. Failing to match up with a buyer, the company informed its sports partners that it was bailing on the RSN model. At that point, the Jazz were well into their discussions with Sinclair and KJZZ.

From the admittedly limited vantage point of the last five months, Utah’s big gamble already seems to be paying off.

“We definitely took a bet on ourselves,” Klein said. “We focused on the fan first and then bet on ourselves to make up the revenue and to create an incredible fan experience. We’re trying to do as much as we can to bring our fans into the story of the team, both on and off the court, from a perspective they never had before.”

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