Current Situation in Early 2026
In early 2026, risks in rights deals — the potential downsides and vulnerabilities in media rights and licensing contracts — are coming into sharp focus after several years of record-breaking agreements. Many high-value deals signed in the early 2020s are now entering their third or fourth year, and early warning signs are appearing.
Regional sports networks (RSNs) in the United States continue to face severe distress. Diamond Sports Group, operator of the Bally Sports channels, remains in bankruptcy proceedings that began in 2023, with ongoing uncertainty over carriage agreements for MLB, NBA, and NHL teams. Several teams have already reverted rights to leagues or found alternative local partners at significantly lower fees.
Cord-cutting accelerates. Pay-TV households in the U.S. have fallen below 50 million for the first time, down from over 100 million a decade ago. This directly impacts linear broadcasters who committed to multibillion-dollar sports rights packages expecting stable distribution revenue.
Streaming profitability remains elusive for several players. Despite subscriber gains, high content spending and rights fees contribute to continued losses at services like Peacock and Paramount+. Warner Bros. Discovery reported streaming segment challenges in late 2025, contributing to its decision to pursue the studio sale to Netflix.
Piracy levels stay elevated, particularly for live sports and premium series, with illegal streams often outperforming legal options in accessibility and cost. Overbidding concerns linger from the 2021-2024 cycle, where rights values doubled or tripled in some categories.
Predictions for 2026
In 2026, the most prominent risks will center on unsustainable pricing from past cycles, accelerated cord-cutting effects, and piracy erosion of premium content value.
First, unsustainable prices will become visible through mid-cycle corrections. Several regional or secondary rights packages are likely to see renegotiations downward or outright terminations. Leagues may take back local rights from struggling RSNs and shift to direct-to-consumer models or lower-value over-the-air partnerships, accepting 30-50% fee reductions in affected markets. This follows the pattern seen with teams like the Phoenix Suns and San Antonio Spurs in prior years.
Second, cord-cutting and platform fatigue will pressure national deals. Traditional broadcasters facing declining affiliate fees may seek relief clauses or reduced payments in existing contracts. If economic conditions soften, advertising revenue shortfalls could trigger financial covenants or force rights holders to accept deferred payments or shorter extensions at lower rates.
Third, piracy will intensify as a risk factor for live and premium content. With more exclusive windows across fragmented platforms, illegal streaming sites are expected to capture larger concurrent audiences for major events. Estimates suggest piracy could erode 10-15% of potential legal viewership for high-demand properties, reducing perceived value in future negotiations.
Additional risks include regulatory interventions in consolidation deals and currency fluctuations affecting international rights payments. Smaller platforms may default on or restructure obligations, while overreliance on ad-supported tiers exposes deals to macroeconomic advertising cycles.
Overall, 2026 will mark a correction year: several high-profile deals will face public stress tests, with 5-10 notable restructurings or terminations across sports, film licensing, and event rights.
Challenges and Risks
The primary challenge is the feedback loop created by past overbidding. Rights holders accustomed to escalating fees may resist downward adjustments, leading to prolonged disputes or lost seasons. Leagues could face revenue cliffs if multiple partners falter simultaneously.
Fragmentation compounds the problem: consumers facing higher aggregate subscription costs become more price-sensitive, accelerating churn and making it harder for platforms to justify premium rights spending.
Piracy evolves with technology. AI-assisted streams and decentralized distribution make enforcement harder, while legitimate services struggle with geo-restrictions and blackout rules that drive users to illegal alternatives.
Economic downturn risks amplify everything. A mild recession could slash advertising budgets by 10-20%, hitting ad-supported models hardest and triggering domino effects across bundled rights packages.
Regulatory risk grows as governments examine media concentration and consumer costs. Delayed or blocked mergers could strand content in limbo, reducing licensing revenue.
Finally, talent and production costs continue rising even as rights revenue faces pressure, squeezing margins for creators and platforms alike.
Opportunities
Despite the challenges, these risks create openings for correction and innovation. Downward fee adjustments in troubled segments could restore sustainability, allowing broader distribution and lower consumer prices in some markets.
Direct-to-consumer shifts give rights holders greater control and direct fan relationships, potentially offsetting lower per-unit revenue with higher volumes and ancillary sales.
Anti-piracy technology improves: better watermarking, faster takedowns, and international cooperation may gradually reduce illegal viewing.
Platforms under pressure accelerate efficiency: shared infrastructure, joint ventures, or white-label services could lower delivery costs while maintaining reach.
Risk awareness encourages more conservative deal structures—shorter terms, performance clauses, and revenue shares—that align incentives better than fixed guarantees.
Creators may benefit indirectly: pressure on platforms could lead to more selective, higher-quality investments rather than volume-driven spending.
Conclusion
In 2026, risks in rights deals will materialize most visibly through pricing corrections in regional sports, accelerated cord-cutting impacts on traditional partners, and persistent piracy erosion. Several deals from the previous boom cycle will face restructurings, terminations, or significant downward adjustments.
These challenges threaten revenue stability for leagues, platforms, and creators while raising costs and barriers for consumers. Yet they also present opportunities for more sustainable models, innovative distribution, and realigned incentives. The industry that emerges from this correction phase may feature lower but more predictable valuations, broader access in some categories, and stronger defenses against piracy—setting the stage for healthier long-term growth.
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