Count Major League Baseball Commissioner Rob Manfred as not a fan of Sinclair Broadcast Group's $250 million plan to parlay its 19 regional sports networks into a streaming service.
Also read: Why Sinclair’s $250 Million Sports Streaming Swing Could Deliver a Walk-off Defeat of Pay TV
For one thing, Manfred doesn't believe Sinclair has enough digital rights from the 14 MLB clubs it has licensing agreements with to pull off such an enterprise.
"The other set of rights they've talked a lot about is gambling rights, they don't have those either," Manfred said Tuesday, speaking at the CAA World Congress of Sports event in New York, an event covered by Sports Business Journal heavyweight John Ourand.
"We've been very clear with them from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we're not just going to throw them in to help Sinclair out.”
Through an Securities Exchange Commission filing in June, Sinclair revealed plans to raise $250 million to create a live sports OTT venture based on its RSNs, which are managed by a separate company called Diamond Sports Group. Sinclair also outlined a plan to restructure about $8 billion in debt.
Manfred described reports that MLB would agree to taking an ownership stake in order to offer Diamond the necessary digital rights as "not accurate."
In fact, the commissioner described Sinclair's RSN business as perhaps one MLB has very little interest in integrating with at all. Like all RSNs, the Diamond Sports Group channels have to deal with cord cutting. But the debt makes the story much more "negative," Manfred said.
"The other part of their problem is there's excessive leverage on that business." Manfred said. "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."
