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Monday, October 11, 2021

Fanatics reportedly could enter the sports media world, with many believing Sinclair’s RSN business could go bust

Per SBJ, Fanatics, the merchandising company that has exclusive deals with numerous leagues and has slipped its way into the trading card business, could become a player in the sports media landscape.

As usual, talks are preliminary, and Fanatics is just one company that has been involved.

One of the most intriguing ideas that has been discussed recently involves Fanatics CEO Michael Rubin, an executive who has not been known for sports media deals but who has had several meetings in recent months to see if there’s a path for his company to jump into the flagging RSN business.

Rubin’s meetings with league, team, distribution and network executives have been dormant for several weeks and nothing is imminent, as sources say Fanatics is concentrating on expanding other parts of its business before tackling media.

Several sources said that these talks with Rubin could pick back up again next year. Plus, leagues, teams and media companies are considering several options beyond Fanatics.

Also of note in this article: various executive think that Diamond Sports, the Sinclair subsidiary that runs the Bally Sports RSNs, is on the road to bankruptcy.

If Fanatics were to make a move, it would need to get control of the local rights, which may be the easiest step. Sources say NBCUniversal and AT&T have been trying to find buyers for their RSNs. And top executives from leagues and media companies share a common belief that the Sinclair subsidiary Diamond Sports Group, which owns 21 Bally Sports-branded RSNs, could be headed into bankruptcy.

RoyalsRetro (AG#1F) Posted: October 11, 2021 at 01:46 PM | 17 comment(s) Login to Bookmark
  Tags: regional sports networks

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   1. Walt Davis Posted: October 11, 2021 at 06:51 PM (#6045558)
Sinclair only bought these two years ago (it's the old Fox RSNs), going bankrupt already.
   2. Mayor Blomberg Posted: October 11, 2021 at 07:56 PM (#6045575)
OK, a company called Fanatics. Saw the headline and thought, More fanatic than Sinclair? Not possible.
   3. Tulo's Fishy Mullet (mrams) Posted: October 11, 2021 at 08:30 PM (#6045585)
No fan of Fanatics. Not that I buy a bunch of gear or merchandise but it is merch by numbers stuff.
   4. Never Give an Inge (Dave) Posted: October 11, 2021 at 08:32 PM (#6045586)
Don’t know his political affiliation, but the CEO of Fanatics has been very active in the movement to reform the probation and parole system in the US. I’m sure he’s not perfect, but I’d rather have him involved in baseball than Sinclair.


I saw him speak on a panel on the topic with Meek Mill and others. Seemed genuine.
   5. Mayor Blomberg Posted: October 11, 2021 at 09:28 PM (#6045607)
Good for him. Thanks Dave.
   6. Pat Rapper's Delight (as quoted on MLB Network) Posted: October 11, 2021 at 09:31 PM (#6045610)
Sinclair subsidiary Diamond Sports Group, which owns 21 Bally Sports-branded RSNs, could be headed into bankruptcy.

Faster, please!
   7. Barry`s_Lazy_Boy Posted: October 12, 2021 at 02:53 PM (#6045840)
Sinclair heading for bankruptcy is delicious. They've created a lot of contract standoffs and unaired games with their positions, good to see their comeuppance.

   8. RoyalsRetro (AG#1F) Posted: October 12, 2021 at 04:16 PM (#6045855)
Manfred bashes Sinclair.

Manfred pointed to Sinclair’s troubles as a reason the RSN business has seen such negative stories. “Fewer subs, it makes the business more difficult. I think that the negativity surrounding the RSNs has been increased exponentially as a result of the situation with the Sinclair (Broadcasting) subsidiary Diamond. Part of their problem is cord cutting. The other part of their problem is there's excessive leverage on that business." Manfred: "If you think about what they paid for it, how much debt they have on it, I mean, you think it's over 80%, it's a huge number. And that leverage has produced headlines that are more negative. There are RSNs out there that they're not thriving or growing, but they're going to survive. Look, look, there are RSNs, YES and NESN that have businesses that remain profitable, they're affected by cord cutting. But the fact of the matter is I think the negativity has been increased by the Diamond situation.”
   9. Walt Davis Posted: October 12, 2021 at 05:53 PM (#6045873)
<i>Sinclair heading for bankruptcy is delicious.<i>

The Sinclair subsidiary, Diamond Sports Group, is heading for bankruptcy. Sinclair might be doing fine.
   10. Jay Seaver Posted: October 12, 2021 at 07:33 PM (#6045901)
The Sinclair subsidiary, Diamond Sports Group, is heading for bankruptcy. Sinclair might be doing fine.

How valuable are its main holdings - local television stations - in the cord-cutting age? I get the feeling the folks cutting cords aren't putting out antennae and connecting them to DVRs versus getting the network programs on Hulu/Peacock/P+/Prime (though I see Amazon & Tivo apparently do sell boxes that do that). I kind of figured the sports play was a way to get ahead of that collapsing as the folks who still primarily watch shows that way die off, but if that's backfiring, I suppose they could be in trouble.

And even if the broadcast business is generally still good, Sinclair seems like the weakest model, since it's so centralized and likely doesn't invest as much in local news, which is probably where most of those stations' value is now that their network/syndicated programming is so easily available elsewhere. Kind of like local papers that way - cut to the bone until they're not offering enough local content to survive.

(FWIW, I've got friends and family members who work at Sinclair-owned stations, so I'd kind of like them to get spun off to good local owners before the parent company crashes and burns)
   11. DL from MN Posted: October 13, 2021 at 08:25 AM (#6046039)
Is Fanatics really going to outbid Amazon or one of the other streaming services for the rights?
   12. RoyalsRetro (AG#1F) Posted: October 13, 2021 at 10:14 AM (#6046047)
If they're more motivated, sure. Amazon didn't even bid on the rights last time around.
   13. Jay Seaver Posted: October 13, 2021 at 12:16 PM (#6046085)
I'm not sure how valuable live sports are to platforms like Amazon/Netflix that aren't selling advertising. Baseball doesn't add to their library, so it's a line item that has to directly pay for itself every month, unlike a movie or a series that adds value even after people aren't signing up just to see it. Broadcast and cable networks get a lot more out of sports right now, especially if we're talking about local teams rather than the playoffs.

I suppose it's possible that Fanatics could do something with it that more traditional groups can't - in the way that Sinclair was trying to squeeze a little extra out with gambling partnerships, I suspect they could work their merch/memorabilia business into the broadcast, especially if they could drive impulse purchases ("player X just hit an amazing home run - click below to buy a t-shirt!"/"we can have a custom framed print of this moment at your door in two days!"). But it seems more likely we're just seeing a bubble burst and lots of people are going to have crazy ideas about what they can do now that prices for these rights are about to start falling.
   14. McCoy Posted: October 13, 2021 at 01:08 PM (#6046088)
Presumably live TV would have commercials and they could and probably would charge a premium for a sports package.
   15. RoyalsRetro (AG#1F) Posted: October 13, 2021 at 01:50 PM (#6046099)
Fanatics is flush with cash from investors and needs to make a big splash to justify its valuation. They already pushed Topps out of the trading card business.
   16. Walt Davis Posted: October 13, 2021 at 05:53 PM (#6046160)
Broadcast/cable rights are not the same as local streaming rights (which may or may not be included in those contracts) and MLBtv owns the out-of-market streaming rights. I see no reason that Amazon/Netflix would be interested in the RSNs even if it did allow them the right to stream Reds games in Cincy.

#10 -- don't know nor does it matter to a baseball website. I was just pointing out that Sinclair created a new corporation to take on this highly leveraged deal, presumably precisely so if it went belly-up, it wouldn't take down Sinclair with it. Maybe Sinclair is headed to bankruptcy, maybe not ... but the excerpt makes no such claim about Sinclair, only about DSG.
   17. The Yankee Clapper Posted: October 17, 2021 at 05:49 PM (#6047024)
MLB In Talks To Launch Streaming Service Without Cable:
Major League Baseball is in talks to launch a nationwide video-streaming service that would enable fans to watch their teams’ hometown games without a cable-TV subscription, The Post has learned. . . . The National Basketball Association and the National Hockey League are also considering partnering with MLB on the new streaming service, sources said. Insiders say subscription rates would vary by geographic market and could be between $10 and $20 a month — well below the monthly cost of most cable-TV packages, which can easily stretch past $100.
. . .
In exchange for Sinclair backing its streaming plans, MLB is open to a proposal from Sinclair in which the league would cut the roughly $1 billion in annual fees Sinclair pays teams for cable broadcast rights, giving its Diamond unit more breathing room to refinance its loans before they mature in 2026, sources said.
I would think Sinclair would want more money and/or an equity stake in the streaming service that will be competing with its regional sports networks, but everything is probably negotiable.

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