SBGI – Sinclair Raising $250 Million For Sports-Focused Streaming Service

Sinclair Broadcast Group Inc. is reportedly raising $250 million to finance an online streaming service focused on sports that would bring together content from its many local cable networks carrying baseball, basketball, football, hockey and college sports.

The streaming service could have a huge impact in reshaping what has been a struggling sector of the struggling cable industry, its regional sports networks. The New York Post, which first reported that Sinclair is raising the money alongside investment fund LionTree, quoted a “director for an unaffiliated broadcaster” saying the deal, if consummated, “will change the industry more quickly than I imagined.”

The service would only be available for people living within the footprint of 21 regional sports networks around the country that Sinclair acquired from Disney for nearly $10 billion in 2019, the Post reported. It will require approvals from major sports leagues and teams to acquire local streaming rights alongside its existing broadcast deals.

Sinclair aims to launch the service by the start of next year’s Major League Baseball season in April, and projects it could have 4.4 million streaming customers by 2027, outstripping YouTube TV’s overall viewership.

Broadcast and cable networks have been renewing their TV rights with the NFL, NHL and other leagues at stratospheric new price levels, in part because the deals include streaming rights too, and because sports remains one of the few tune-in programming types left to legacy TV providers.

Sinclair’s RSN acquisition was a huge bet for the broadcasting giant, but it has been somewhat snakebitten in the two years since the deal consummated, most notably by the pandemic’s disastrous impacts on live sports, and by the corrosive effects of cord-cutting.

Sinclair still claims 52 million cable subscribers for its sports networks as of the end of 2020, despite cord-cutting and the loss of carriage deals with Dish, YouTube TV and Hulu.

Major regions and markets covered by the networks include Los Angeles, San Diego, Arizona, Detroit, New Orleans, Indiana, Ohio, Oklahoma, Florida, Kansas City, and Wisconsin. The company says its networks are the TV home to more than half of all the Major League Baseball, NHL and NBA teams in the United States.

SBGI

Maryland-based Sinclair has long beens one of the nation’s biggest broadcast TV station groups, with 186 stations in 87 markets. But it also has diversified significantly over the past few years, notably buying up those 21 Fox

FOXA
regional sports networks after Disney

DIS
divested them.

Under a naming-rights deal with Bally’s, Sinclair acquired 15 percent of the casino operator last year, renaming its RSNs Bally Sports Regional Networks, and also received $85 million over 10 years. Over the past year, Bally’s has also made several acquisitions, including Bet.Works, Monkey Knife Fight, and SportCaller.

Separately, Sinclair joined with Amazon

AMZN
and the New York Yankees to buy control of the YES Network in New York City, and partnered with the Chicago Cubs to launch the Marquee Network in that city last year. Sinclair also owns the Tennis Channel and Stadium, a linear sports network with some on-demand content, and digital networks Comet TV, Charge!, and TBD.

The company also has been running its hybrid STIRR online service for about two and a half years. STIRR features an array of linear, ad-supported VOD programming like that typically found on platforms such as Tubi, Roku Channel and IMDb TV. But STIRR also features local news, sports, public affairs and other programming from dozens of its local stations.

A separate venture, NewsON, features free local TV news from more than 275 stations owned by various groups in more than 165 markets.