MSG Networks to launch sports streaming service this summer

The Yahoo Finance Live team discusses MSG Networks' plans to launch a new streaming service.

Video Transcript

[AUDIO LOGO]

DAVE BRIGGS: My play is Madison Square Garden. MSG launching a streaming service for the Knicks, the NHL's New York Rangers, the New Jersey Devils, and the Buffalo Sabers. The service is set to launch this summer and costs $30 a month or $310 a year. MSG+ will only be available in the region that already carries its MSG networks on cable TV. And that's a real sticking point there. Traditional TV subscribers will also get access to MSG+ for free.

Now, last year, New England Sports Network, or NESN as you might know it, launched its own similarly priced streaming service for the Red Sox and Boston Bruins. This, though, on the heels of reports the Diamond Sports Group is on the verge of bankruptcy. They broadcast games for 42 teams across Major League Baseball, the NBA, and the NHL. Also, Warner Brothers Discovery also reportedly looking to exit the regional sports networks.

MSG largely flat today. Up 6%, though, this year on reports CEO and Chairman James Dolan could sell a portion of the Knicks or Rangers. Very interesting to see what's happening with sports valuations at the same time the regional television network system appears to be crumbling. Because the valuations for these teams are skyrocketing, and their television outlets locally are in deep trouble. It is a really interesting dynamic.

SEANA SMITH: It certainly is an interesting dynamic. And, Josh, I know you've done a lot of work on this just in terms of the return on investment that people get when they do buy, when they do invest in sports teams. If, in fact, Dolan does decide to go that route, the value of the Knicks clearly will be very interesting to watch, given the fact that valuations have ballooned so much. We had the news this week, Marc Lasry selling his stake. That would value that franchise 3 and 1/2 billion. It's crazy--

JOSH SCHAFER: For a basketball team in Milwaukee.

SEANA SMITH: Exactly.

DAVE BRIGGS: Milwaukee.

SEANA SMITH: And then we're talking--

JOSH SCHAFER: I love Wisconsin, but Milwaukee.

SEANA SMITH: --about the Knicks with New York. So this number could potentially be, I think, crazier than maybe some are anticipating, at least up until this point.

JOSH SCHAFER: Really, what they need to focus on here is they have great fans, right? We know fans are loyal. We know fans want to watch games. We know that from broadcast ratings and things like that. $30 a month for MSG is just too much for me. I'm a streamer myself. I love sports. I pay, I think, it's 6 bucks a month for ESPN+. You don't pay a lot of money for a lot of the other streaming services. 30 bucks is a big, big bite, and I think it's a little bit of sticker shock here. I know that happened with NESN in New England, and I think--

DAVE BRIGGS: Double Netflix?

JOSH SCHAFER: Yeah. Double--

DAVE BRIGGS: And that's hard to justify.

SEANA SMITH: That's very hard to justify.

JOSH SCHAFER: 10 games a month.

DAVE BRIGGS: In particular, if you're in California, a displaced New Yorker, you can't get it. You can only get it here, which complicates that price point.

SEANA SMITH: Yeah. They need to cut it by half, maybe even a third, and they'll be getting the numbers. We'll see. But then the investment might not make sense.