Update on Sinclair and their potential standalone streaming service. MLB and NBA commissioners and industry analysts pretty much crapped on Sinclair's claim they will have a viable streaming app as they appear headed to bankruptcy:
https://www.nexttv.com/news/its-gameover-for-sinclairs-rsn-streaming-plan-analyst-sayshttps://awfulannouncing.com/sinclair/****.htmlQuotes:
LightShed Media Partners analyst Richard Greenfield has described a decidedly bleak prospect for Sinclair Broadcast Group successfully transitioning its debt-ridden Bally Sports-branded regional sports networks into a direct-to-consumer streaming service.
It‘s “#GameOver” for that gambit, Greenfield said in a posting this morning.
Also read: Sinclair Streaming RSN Plan Slammed by MLB Commissioner Rob Manfred
“Sinclair has tried to convince investors that it can avoid a Diamond Sports bankruptcy by transforming its 14 RSNs from being locked into the legacy MVPD/vMVPDs bundles to a direct-to-consumer, over-the-top streaming service … and that there is a robust sports betting opportunity for the Diamond Sports RSNs to take advantage of,” Greenfield wrote.
But Greenfield appears spot on when he said that the whole pitch appears based on a “fabrication:” That is, all 14 Major League Baseball teams that have linear TV licensing deals with Bally Sports RSNs are willing to also license their DTC/streaming rights to Diamond Sports.
Last week, MLB Commissioner Rob Manfred damned the plan — and perhaps, Diamond Sports into eventual bankruptcy — when he said simply that Sinclair doesn‘t “have the rights” it needs to pull off an ambitious DTC plan revealed to investors over the spring.
Extrapolating further, Greenfield described MLB as being philosophically similar to the NBA in terms of how it manages digital rights. The MLB did decide in 2019 to let its teams negotiate their digital rights themselves. To date, however, only four of the 14 MLB teams that Sinclair partners with have offered up their OTT rights: the Miami Marlins, the Tampa Bay Rays, the Kansas City Royals and the Milwaukee Brewers.
Ultimately, Greenfield believes, MLB and NBA teams will work with their respective league and a third-party technology vendor to make their own DTC services, re-negotiating with pay TV operators to preserve whatever revenue is left from the linear ecosystem.
And Sinclair very likely won't be a part of those forward-looking enterprises, he said.
”Sinclair has no expertise in digital or streaming, has never built a direct-to-consumer subscription business and only covers a portion of the U.S.,” Greenfield added. “Sinclair is actually one of the worst possible choices for the leagues to partner with in digital.”
Sinclair bought the Fox Sports RSNs from Disney, as well as the Marquee Network and YES Network, in August 2019 for $9.6 billion, putting them under the control of a separate company it owns, Diamond Sports, and selling the naming rights to the channels.
Much as they did in 2015, when AT&T paid $49 billion for DirecTV, analysts questioned what the heck Sinclair management was thinking paying a such a huge sum of money amid declines for the multichannel video programming distributor business.
Sinclair was left trying to pay off nearly $10 billion in debt with an RSN business that has annually escalating costs in the form of team contracts, but declining EBITDA from pay TV customers continuing to exit the ecosystem.
“After Sinclair purchased the Fox RSNs from Disney, we wrote that we expected the newly renamed Diamond Sports RSN group’s EBITDA of $1.6 billion to turn negative by 2025,” Greenfield noted.
1- The Sinclair RSNs could be headed into bankruptcy. This is something I’m quite sure Ourand would not share if this wasn’t a very real possibility. And it’s entirely plausible when you borrow $8 billion dollars to pay for something that is worth somewhere around $5-$6 billion dollars now.
2- The second- and third-largest RSN owners are themselves trying to sell (these rumors have been out there for a bit).
So basically everyone wants to sell, and the last company to actually buy is perceived to be heading into bankruptcy for doing so. Could things get any worse?
Yes….
Tuesday marked the first day of SBJ’s World Congress of Sports. And the comments about RSNs have been as pessimistic as you can imagine.
While none of this is really new, it’s just bad and getting worse quickly. The vast majority of viewership of RSNs come from NBA and MLB games. Here you have both of those commissioners being pretty brutally honest that the RSN model is in deep ****. That’s especially true around particularly Sinclair, who at this point is beginning to sound like a grenade with the pin pulled out given their debt situation.
At the heart of the matter is that RSNs are a beefy portion of your cable and satellite bill that everyone pays for but few people actually watch. Cable, satellite, and alternatives (including virtual MVPDs like of YouTube TV, Sling, and others) are much more willing to drop these channels as compared to ESPN, which has the bulk of Disney and the rest of the Disney cable channels behind it. This is an easier fight for cable and satellite providers to win, and one that drops customers’ cable bills while pissing off fewer customers.
That’s why Sinclair’s RSN subsidiary (Diamond) is potentially headed to bankruptcy, Comcast and AT&T are hoping someone else will buy their RSNs for some bargain price so it won’t be their problem to solve, and why commissioners are sounding the alarm now and doing it very publicly. The business model is broken and the money is going to start drying up. Urgency has arrived because everyone seems like they have a ticket on the Titanic on this one. That is, except for Fox, who must be loving seeing their former counterparts squirm while they sold at the apex.
What does this means for us fans? 1) There will most likely not be a streaming service for local Magic fans to watch the games unless they have legacy cable anytime soon. 2) Could Sinclair relent and lower their demands and allow YoutubeTV and HULU to carry games again? 3) Watching games will be an issue atleast thru this season, maybe more...
