“We’ve already cleared the path with the distributors to launch direct-to-consumer,” Sinclair CEO Chris Ripley told investor analysts during the broadcast company’s first-quarter earnings call Wednesday. “We have direct-to-consumer rights for the vast majority of our teams, and we’re in discussions to enhances those rights to make the product even better.”
Ripley didn’t outline specifics of the service, such as price point or launch date.
He did address some of the complexities--for example, while Major League Baseball lets its individual teams negotiate video rights, the NBA and NHL conduct these talks at the league level. Ripley said Sinclair is in talks with those leagues to enhance its DTC rights following the culmination of the current 2020-2021 pro basketball and hockey seasons.
Sinclair entered into a joint venture with Byron Allen’s Entertainment Studios, branded Diamond Sports, to buy 19 Fox Sports Networks RSNs from Disney, taking a $4.23 billion write-down last year to complete the purchase. Through a branding deal with casino company Bally’s Corporation, the RSNs were rechristened Bally Sports Regional Networks in March.
The Bally-branded RSNs ended 2020 with 52 million subscribers. But with the 2021 Major League Baseball season well underway, the channels currently lack MVPD distribution on Dish Network, as well as virtual platforms Hulu + Live TV and YouTube TV. These services collectively accounted for more than 15 million U.S. pay TV homes as of the end of last year.
“We don’t comment on the specific status of any distributor negotiation,” Ripley said. “Time will tell if any of these distributors return.”
As Sinclair and Diamond Sports grapple with an incomplete pay TV distribution portfolio, the launch of the Bally Sports-branded TV Everywhere app last month has been a success, the company said.
The TVE app, an important precursor to a DTC launch, merely requires an update of the existing Fox Sports Net app that was already on millions of subscriber phones.
“It was a big technical feat to convert over from Fox Sports Go,” Ripley said. “Now, it’s about improving and enhancing the features in the app.”
Besides improving Bally Sports’ distribution reach, a DTC app would allow Sinclair to exploit “adjacencies” such as sports betting, Ripley said.
The app, he explained, will eventually become “a platform for interaction and socialization for the fan.” And the TVE app is “a tremendous foundational piece.”
Overall, Sinclair said its Q1 consolidated revenue dropped 6% year over year to $1.511 billion.
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