Sinclair Broadcast Group, which plans to build a streaming, direct-to-consumer app to shore up its struggling regional sports network business, is close to a deal with the National Basketball Association, according to a published report.
Diamond Sports Group, the Sinclair RSN unit, is also lining up $600 million in loans to build the direct-to-consumer business, Bloomberg reports.
Sinclair had no comment on the report.
Sinclair bought the 21 Fox regional sports networks from the Walt Disney Co. in 2019, borrowing $9 billion to finance the transaction. Since the cord-cutting by consumers and cost-cutting by distributors have cut into the RSNs’ subscriber base.
Part of Sinclair’s strategy for its sports business is going direct-to-consumer to reach cord-cutters and younger sports fans, but there have been questions about whether or not Sinclair has the right to launch a streaming business.
Baseball commissioner Rob Mandred said that the rights Sinclair has were not sufficient to launch a DTC product. There were also reports Major League Baseball and other leagues were considering launching their own streaming service.
Sinclair CEO Chris Ripley defended the DTC plan and said deals with the National Hockey League and NBA would be announced soon.
Sinclair in December announced a renewal of its deal with the National Hockey League, that included direct-to-consumer streaming for 12 teams.
According to Bloomberg the new NBA deal will give Diamond regional digital rights in addition to the broadcast rights the RSNs already have.
Bloomberg also said the new streaming app will be financed with a new “super-priority first-lien loan” for a group of Sinclair’s current creditors. ■
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