E.W. Scripps is ready to spend big on bringing local games back to broadcast TV at a time when cord cutting has battered cable’s regional sports networks.

Why it matters: Figuring out the future of local sports rights is among the biggest challenges facing the U.S. sports market. And E.W. Scripps is eager to take it on.

Driving the news: Last week, Scripps announced the launch of a sports division that will seek to acquire sports rights for its local broadcast stations nationwide as well as the national network Ion, which Scripps acquired last year.

• “The RSN business model is dying,” Scripps Sports president Brian Lawlor says. “They’re not going to be able to pay what they used to — even if they survive.”

The big picture: No legacy TV industry has been battered by cord cutting like RSNs. Many pay-TV providers like Dish Network eschewed those networks rather than pay the high distribution fees.

• “Some of the regional sports networks in major cities in our country don’t even reach 40% of all the households in the market,” Lawlor says. “That’s not a good business.”
• “Teams that are partnering with, you know, Bally’s and stuff like that — that would be something that would make a lot of sense [for us]. We could solve a problem that is bordering on a crisis,” Lawlor says.

Details: Though most of Scripps’ 61 TV stations are affiliates of the Big 4 broadcast networks, the company also owns many unaffiliated broadcast stations.

• Lawlor wants to fill those stations with live games to help teams reach fans who have left the cable bundle or are subscribed to the wrong pay-TV service.

• “We would be looking in major league sports towns where we have second stations; we have a bunch of those. We’d love to get more.”
• Many of Scripps’ broadcast stations have contracts with the NFL to simulcast games that air on ESPN and Amazon in participating teams’ local markets, as well as rights to preseason NFL games.
• Scripps also owns broadcast rights for the NCAA’s Big Sky Conference.

What’s next: Lawlor thinks local rights deals are headed for a contraction.

• “If we can’t make money on it, we’re not going to do it. The teams that are in a business relationship currently with the RSNs are not going to get what they used to,” he said.
• One way they’ll think about deals differently: incorporating streaming, merchandising, ticketing and sports betting.