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Shuffling The Regional Sports Networks

from Josh Kosman of the New York Post,

MLB, the NBA and the NHL may orchestrate a buyout of the nation’s dominant owner of regional sports TV networks, whose shaky finances pose an increasing threat to their teams, The Post has learned.

The trio of pro-sports leagues are expected to soon begin talks with Diamond Sports, which operates 21 regional Bally Sports networks that account for more than half the local broadcast markets around the country, sources close to the situation said.

A prospective deal is looming as Diamond — owned by Baltimore-based Sinclair Broadcast Group — has been hemorrhaging cash and could be headed for a possible bankruptcy filing if it doesn’t find a white knight in the coming months, the sources claimed.

Sinclair in early 2019 won an auction to buy Fox Sports Networks from 21st Century Fox for $10.6 billion, giving it exclusive rights to broadcast the games of 42 teams. These included 14 MLB teams like the St. Louis Cardinals and San Diego Padres; 16 NBA teams including the Miami Heat; and 12 NHL teams including the Detroit Red Wings.

continued

Filed in: NHL Media, Hockey Broadcasting, | KK Hockey | Permalink
 

Comments

Hippy Dave's avatar

Good riddance.  I never liked giving Sinclair media any ratings.

Posted by Hippy Dave from Somewhere West of Detroit on 09/21/22 at 06:20 PM ET

d ca's avatar

I called this scenario more than a year ago…cord-cutting, carriage of contract issues (MVPD, Comcast NY, DISH), crushing debt of Sinclair, and a ticking clock until team owners took back control.

For anyone that didn’t know Sinclair Broadcast Group reported a $3.2 billion loss in 2020 Q3, including writing off part of the value of the RSNs. By Q4 (reported in Feb ‘21) it was worse.

  Sinclair said that the networks it bought for $9.6 billion are now worth just $5.4 billion, a loss of 44%.

In order to finance this deal Sinclair took on massive debt ($8.2B which covered 80% of the purchase price). That accounted for 66% of the company’s overall debt ($12.5B).

And what is happening with revenues? They are going down. Mainly due to cord-cutters.

Newsflash, the RSN’s don’t produce the broadcast or the pay the talent. Much like CBC now—they are simply the middleman distributors. This is going to be a problem as while teams will have to observe existing contracts, they won’t have to re-up in the future as these contracts expire.
...
So, Sinclair’s investment already had a ticking clock on it. Local fans will soon have the ability to purchase the stream from the league’s streaming service .
....
So Sinclair is going to try to maximize it’s leverage in the short-term. If you don’t think there are going to be massive price increases and carriage of contract fights with cable and streaming services: you don’t know Sinclair’s history including how YouTube TV, Hulu Live TV, and fuboTV dropped the regional sports channels. Last year, both Dish Network and Sling TV dropped the channels from their service.

Posted by d ca on 03/18/21 at 01:28 AM ET

What I was wrong about was that revenues only went down slightly (because they raised rates). But that was a far cry from Sinclair’s projection of growing every year from the current (in 2021) 1.5B to 2B (by 2027).

Regardless of what anyone thinks (and justifiably so) about Sinclair Media…this is not a good thing:

it’s going to cost sports fans more money to watch their local teams. Remember when streaming was as simple as downloading and signing into the Fox Sports Go app (before May 2019—it was free with a cable subscription). Now it is 19.99 a month or 190 for the year.

Does anyone think when owners get direct cuts the fee won’t be substantially higher? Get ready to get bent over professional sports ownership management-wise.

Posted by d ca on 09/21/22 at 10:47 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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