Bally Sports RSNs Seek Emancipation From Sinclair Amid Parent's 'Strained Relationship' With Sports Leagues

Sinclair Broadcast Group
(Image credit: Getty Images)

In a move that further separates parent company Sinclair Broadcast Group from the Bally Sports regional sports channels it purchased three years ago, Diamond Sports Group, the subsidiary that oversees the 19 Bally-branded RSNs, has named former NBC Sports and ESPN executive David Preschlack as its new CEO

The move, according to the Sports Business Journal's John Ourand (opens in new tab), comes as creditors have become increasingly "frustrated with the animosity that has developed" between Sinclair and Bally's major sports-league partners, specifically Major League Baseball. 

To date, only five of the 14 MLB teams licensed by Bally Sports participate in the RSNs new direct-to-consumer streaming service, Bally Sports Plus. 

Extrapolating for Next TV in a Monday morning email exchange, Ourand said these relationships have been "strained for years." 

Diamond's board hopes that Preschlack, a 25-year sports-media veteran who most recently served as president of NBC Regional Sports Networks, will provide the league partners with more confidence that their TV audiences can still grow as linear pay TV erodes and direct-to-consumer streaming is still in its nascent stages. 

"The creditors hope that new blood at Bally’s will start to turn that around," he added. 

Also read: Bally Sports Breaks Bad: With Subs Down 10% and Cash-Flow Half of 2022 Projections, Increasingly Desperate Sinclair Looks to 'Deleverage'

Sinclair and its Diamond subsidiary remain heavily in debt following the purchase of 21 Fox Sports regional sports networks three years ago for $9.6 billion. 

David Preschlack Diamond Sports

(Image credit: David Preschlack)

Servicing that debt has become an issue, with the RSN's distribution down 10% year over year and cash flow coming in at half of start-of-2022 projections. Diamond just took a $1.2 billion write-off on the value of its RSNs.

Meanwhile, Sinclair just reported "high engagement" on the Bally Sports Plus service launched over the summer. But the lack of any provided user metrics has left the market skeptical that the streaming service will provide meaningful replacement revenue for declining linear pay TV channels anytime soon.

Notably, it was MLB Commissioner Rob Manfred's comments (opens in new tab) while being interviewed by Ourand at the CAA World Congress event back in October of 2021 that revealed the lack of confidence MLB has in Sinclair. 

Yes, Manfred conceded, MLB's 14 teams licensing their content to Bally Sports channels needed more reach, but he wasn't sure at all that Bally Sports Plus was an effective way to achieve that goal. 

One thing Manfred was sure about: All that debt Sinclair took on to buy its RSNs was a problem. "There's excessive leverage on that business," he said

Since that time, five of those 14 MLB teams have signed onto the $20-a-month Bally Sports Plus service, as have all of the NBA and NHL franchises under the Bally Sports umbrella. 

But the 2023 MLB season just over 100 days away. It would be a major bummer for Bally Sports Plus to be constricted from carrying its MLB teams in nine of its markets. 

Meanwhile, according to analysts, the leagues have "sobered up" in terms of their attitude toward Bally Sports -- they need find a way to work with the RSNs to keep the revenue up ... and their mega-expensive player payrolls met. 

And that's not anywhere close to happening with their own DTC services.

Any solution is going to come from working with Bally and Diamond. And with Preschlack in place, they no longer have to worry about Sinclair. ■

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!