It's really just burning the biggest fans. I personally don't care about any sports, but if I did, I'd probably just find some shady streams online instead of trying to deal with all their restrictions, rules, and commercials. It really seems like they have no clue what people want, since they're unwilling to give it to them at any price. Smart business, IMO, would say, OK, you want no ads and no blackouts? $500 a year, or whatever. Figure out what it would cost and show people, so they understand how much they pay with their credit card and how much they pay with their time + eyeballs each month.
Edit: I'm sure the hardcore fans would take the more expensive package. You could even offer things like exclusive programming which would happen during times when commercials play for other lower-tier subscribers. Make it even cost twice what you're losing in ad revenue. The good will it would do for the brand, to even offer a no-commercial, no blackout, no contract, no BS option is not a zero-dollar value for the company either.
Why can't sports teams do that? Buy paper tickets for individual games for some amount. Buy digital access for individual games for some other amount. Buy digital season passes for another amount. Buy paper ticket season passes, includes digital season passes. Pre-order your digital season pass before the team goes to pre-season training and get a voucher for a free bleachers seat for one of the games. If you have a digital season pass, pay a premium to use an app which lets you decide which camera to watch through, control over rewinds, etc. Pay another premium to get get a version of the game, a week after it happened, with audio commentary tracks from the coaches and players.
It's not that hard, and honestly, they'd probably get even more money from the die-hard fans than they're getting now. The executives are just stuck in the stone age.
Where I live now, a Sharks playoff game ticket is cheaper than me going to a regular season hockey game.