Regional sports network penetration is falling while the rights fees owed to teams keep climbing — and Charter executive Tom Montemagno says the industry has not found a solution.

The shutdown of Main Street Sports Group and its FanDuel Sports Network earlier this year was the latest blow to the long-struggling RSN model. The fallout now extends beyond sports teams and fans to the pay TV distributors who must make sense of the chaos for their customers.

"[RSNs] are very expensive products that we no longer can tell non-sports fans you have to pay for this. We've re-tiered them… So the penetration of RSNs is going down and the rights fees [owed to the teams] are still going up, so there's a problem there," said Montemagno, Charter's EVP of Programming Acquisition, during a sports panel at The WICT Network Leadership Conference this week.

"We haven't as an industry found a solution yet. I think the leagues are rallying around some ideas that they may put in place in the future that may address it. But fundamentally, the cost of goods has to be revisited for this to be healthy," he added.

What are teams doing after losing their RSN deals?

NBA, NHL and MLB teams that partnered with Main Street spent recent months scrambling to cut new local distribution deals after their rights reverted.

"All those rights went back to these teams, who've never managed their rights before, so now they're thinking, 'How do we make sure that our fans can see our games? Where do we go?' Not to mention the loss of revenue that caused them," said Friday Abernethy, GM of Monumental Sports Network, during the panel.

The interim fixes point in several directions at once:

• Many teams signing one-year deals while waiting for league-level plans
• Amazon signing a couple of deals, DAZN signing many of them
• Some teams going direct-to-consumer streaming, others running hybrid local models

"[The teams] want to provide streaming access, but then a lot of them are also unlocking local… because some people want to stream and some don't. It's trying to be everything for everybody while managing this fundamental change in the business that can be overwhelming," said Amy McDevitt, Head of Sports Brand Partnerships at Amazon Ads.

How bad is fragmentation for viewers?

The result is a patchwork of streaming, OTA and RSN deals that makes the live sports schedule more fragmented for fans. Distributors carry the burden of explaining it.

"It's a real problem. We as the distributor get those phone calls from customers, so the onus is on us to try and help and solve that," Montemagno said. "I think this coming basketball season, the fragmentation is going to be even more problematic on the local front, with a bunch of teams now going exclusively direct-to-consumer, some doing hybrid. It's only getting worse, and so we're trying to help consumers."

Charter, which owns and manages two RSNs in the L.A. market and holds an ownership stake in SNY, has responded with viewing features aimed at reducing friction. Enhanced voice search lets fans look up live games across linear TV and streaming apps. Team pages aggregate an individual team's games in one hub. Its TV packages bundle 11 streamers, several of which carry live sports.

"It definitely helps because the customer doesn't have to pay three or four times to get the NFL," Montemagno said of the hybrid Spectrum TV bundles. "Making that navigation seamless between linear and jumping to the apps is something we're working hard on."

The approach appears to be paying off. Charter said a better video customer experience, driven by its Seamless Entertainment platform, led to video subscriber gains in 4Q25 and slowing churn in subsequent quarters. Sports fragmentation remains "hard to solve," though, now that it is "really eking into the local front, too."

Who pays to fix the RSN model?

Montemagno drew a hard line on where the fix cannot come from: the bills of non-sports fans.

"I think we all agree it's not going to get fixed on the backs of consumers. We as distributors are not going to let that happen," he said. "There's got to be a solution here that is not, 'We're just going to charge all consumers, even if they're not sports fans.' Those days are over."

With the coming basketball season set to test how many teams go direct-to-consumer versus hybrid, and leagues still working on longer-term plans, the pressure now shifts to revisiting the underlying cost of sports rights before the next round of local deals.