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Wednesday, April 28, 2021

Sinclair Owes $1.82 Billion in RSN Fees Amid Tough Ad Market

If getting dumped by the virtual MVPDs has taken a bite out of Bally Sports’ reach, the ongoing Dish stalemate is costlier still. The satellite TV service closed out 2020 with 8.82 million video subscribers, and its Sling TV added another 2.47 million households to the pile. On Opening Day of the 2021 MLB season, some 11.3 million U.S. homes were unable to access the Sinclair RSNs. (Not that Bally Sports is alone in feeling the chill from Dish, as the operator has also failed to reach a carriage deal with the NBC Sports RSNs and MASN, the home network of the Orioles and Nationals.)

Even some elite, team-owned RSNs are now struggling to keep the faith. “I used to say that the RSN model is good for five to 10 years, but I have to modify that,” said one sports net programming chief. “COVID will have a more lasting impact on sports than perhaps we’d anticipated. The RSNs are not in a great spot right now—along with the battle with distributors, the advertisers are not clamoring back.”

The prognosis is grim. “The impact of the last 14 months has been profound, but let’s face it, the next six to 12 months may be too much to come back from.” When asked if there’s any lifeline to grasp, the network exec said, “Gambling can’t happen soon enough.”

Obviously, the fact that a major casino group forked over $85 million for the right to rebrand the Sinclair RSNs in its own image suggests the emerging sports-betting market may not be a long shot. But will the opportunity be sufficiently lucrative to offset the loss of so much affiliate revenue?

RoyalsRetro (AG#1F) Posted: April 28, 2021 at 04:36 PM | 16 comment(s) Login to Bookmark
  Tags: regional sports networks, sinclair, television

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   1. Pat Rapper's Delight (as quoted on MLB Network) Posted: April 28, 2021 at 05:42 PM (#6015927)
What's the O/U for how much longer they'll be able to stay afloat?

“Gambling can’t happen soon enough.”

If there's any justice in this world, the gamification of televised sports will be just as much of an economic savior as state lotteries have been to state education budgets (meaning, "not at all") and sports leagues can reap the benefits of replacing fans of sports with fans of gambling.
   2. bookbook Posted: April 28, 2021 at 08:57 PM (#6015967)
If Sinclair is hurt, the American people benefit.
   3. Walt Davis Posted: April 28, 2021 at 11:38 PM (#6016060)
Almost enough money to get a MLB expansion franchise
   4. DL from MN Posted: April 29, 2021 at 08:51 AM (#6016075)
It probably is difficult to sell ads when you have no audience because nobody will carry your channel.
   5. DL from MN Posted: April 29, 2021 at 08:53 AM (#6016076)
In some ways this feels like the big guys squeezing the newcomer into the market. AT&T, Disney, Viacom and Universal have enough power to crush Sinclair and buy up it's assets (including the RSNs) for cheap.
   6. Jay Seaver Posted: April 29, 2021 at 10:41 AM (#6016099)
I don't know that any of them are interested in the Sinclair/Bally networks, though - Disney had to divest them, Comcast/Universal has been reducing headcount at the local Comcast/NBC sports channels, and AT&T has seemingly been actively hostile to the parts of Warner that "only" reliably make a little money. They'll absolutely play hardball on carriage fees, but they really don't seem to have much interest in owning/operating those channels any more. Heck, if Channel 7 had dropped their affiliation a few years later, I suspect NBC would have just advertised Peacock a little harder and maybe put the national NBC feed on Comcast rather than setting up a new station/affiliate in Boston.
   7. bigglou115 is not an Illuminati agent Posted: April 29, 2021 at 11:40 AM (#6016107)
For all the prognostication that baseball is dying we've had over the years, I don't think enough people are concerned about what this means for the game. If the RSN's go down hard, that dumps a ton of games on the open market. They won't all find homes. The Sox and Yanks will get 162 aired still, but who's going to pay for the Pirates at a price ownership will accept? End of the day, if there's not TV money coming in per game, the owners will cut games, and they'll do it drastically, and last year taught us the downstream effects. With fewer games you'll have fights over salary in existing contracts, new contracts will be drastically smaller, you'll have issues with playoff profit allocation. The downstream effects of the RSN bubble bursting will, IMO, almost certainly cause a strike, and potentially one where the parties are so far apart we don't get baseball for longer than a season.
   8. Tom Goes to the Ballpark Posted: April 29, 2021 at 12:10 PM (#6016114)
If the RSN model was headed for imminent failure the Marlins would not have received a massive increase in rights fees in their new deal.
   9. DL from MN Posted: April 29, 2021 at 12:30 PM (#6016118)
new contracts will be drastically smaller

Or the rights will revert back to MLB and the teams will be able to sell streaming packages to local subscribers.
   10. Jay Seaver Posted: April 29, 2021 at 12:37 PM (#6016119)
Maybe the Marlins were undervalued before?

I don't necessarily think this issue will actually be apocalyptic for teams/RSNs - The end result, I suspect, will be negotiating for lower carriage fees in exchange for the networks being able to sell subscriptions directly to individual consumers.
   11. Tom Goes to the Ballpark Posted: April 29, 2021 at 12:48 PM (#6016121)
The new Marlins deal is for $50M (up from $20M) per year. That is in line with other small markets. If the bottom was falling out of the RSN business model I would’ve expected to see a much more modest number.
   12. The Yankee Clapper Posted: April 29, 2021 at 01:38 PM (#6016126)
Content providers are the kings, and MLB provides a lot of content. Maybe some of the media middlemen will struggle a bit as consumers sort out the multitude of options now available, but technology allows MLB to go it alone if necessary. I don’t see the RSNs going away anytime soon just because they’re fighting with cable companies about how to split revenues. That just shows that there is enough money to be worth fighting about.
   13. spycake Posted: April 29, 2021 at 01:57 PM (#6016129)
AT&T, Disney, Viacom and Universal have enough power to crush Sinclair and buy up it's assets (including the RSNs) for cheap.
AT&T TV is the only streaming service that currently carries most Sinclair RSNs.
   14. villageidiom Posted: April 30, 2021 at 09:45 AM (#6016256)
AT&T TV is the only streaming service that currently carries most Sinclair RSNs.
Of the 4 media companies mentioned, they are the only one that doesn't operate significantly as a content provider. AT&T needs content middlemen like Sinclair, for now.
   15. Jay Seaver Posted: April 30, 2021 at 10:09 AM (#6016263)
AT&T owns Warner Brothers, which means that they're probably second only to Disney in terms of a content library and production. They're not exactly sure what to do with it because they're so big that they don't really want to bother with small-but-profitable operations (RIP FilmStruck, DramaFever, Picturehouse, New Line as an actual entity, the Warner Archive shop, and that's before getting into how they're squeezing DC Comics and other divisions) rather than just dumping everything into HBO Max.
   16. Tom Goes to the Ballpark Posted: April 30, 2021 at 12:24 PM (#6016306)
Also, AT&T owns four MLB RSNs (Colorado, Houston, Pittsburgh, Seattle).

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