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Wednesday, May 06, 2020

Sinclair CEO Chris Ripley confirms minimum game delivery requirements, which are resolved at the end of a season or calendar year

Here’s the relevant wall of text from Seeking Alpha’s transcript of the call, which includes Ripley saying that Sinclair has continued to pay the teams and distributors have kept paying Sinclair the carriage fees.

The sports rights agreements entered into between our RSNs and the professional sports teams typically include a minimum game delivery obligation. Adjustment provisions in those agreements address shortfalls by teams including rebates tied to the number of games actually deliver. Commercially, certain of our affiliation agreements with distributors also include game delivery minimum.

We can — if we cannot deliver the minimum number of games under the agreements, there is a mechanism for distributors to recoup a portion of their carries fees. Each contract is unique and confidential and therefore has different parameters and remedies for any potential shortfall of games deliver. Despite the postponement of games of play, we continue to make payments to the teams and our distribution partners continue to pay us.

The mechanism for truing up for any content not received under our sports rights agreements or not delivered under our affiliation agreements generally takes place at the end of the season or calendar year. While we believe that sports will come back this year and be in high demand at this time, the leagues have not indicated when games will resume. Therefore, we do not know where we will end up in relation to the game delivery minimums. Keep in mind that the NHL and NBA regular seasons were almost complete when the seasons were suspended, so shortfalls in those weeks if any should be minor.

RoyalsRetro (AG#1F) Posted: May 06, 2020 at 10:59 PM | 0 comment(s) Login to Bookmark
  Tags: regional sports networks

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