Disney unloaded 21 regional sports networks in 2019 to Sinclair Broadcasting, which paid $9.6 billion for the privilege. Of course, Sinclair had no way of knowing a global coronavirus pandemic would decimate most sports coverage for months.
Late last year, Sinclair took a $4.23 billion charge as a result of the sports network business, or lack thereof. The company posted a loss of $3.21 billion for the third quarter.
Sportico’s Anthony Crupi said that a recent filing with the Securities Exchange Commission indicated Sinclair owes $1.82 billion in rights fees in 2021.
Bally Sports has partnered with Sinclair to brand the regional sports network in 18 jurisdictions.
Diamond Sports Group, which operates the rebranded Bally Sports networks for Sinclair, had to pay a lot to retain broadcasting rights for the Milwaukee Brewers and Miami Marlins—$85 million together—on top of last summer’s fee of $50 million a year for the Kansas City Royals’ rights. That’s on top of the other fees across local networks.
The networks have had little presence on Dish Network, YouTube TV, Hulu, and FuboTV, which would have offered a source of revenue for the networks.
“I used to say that the regional sports network model is good for five to 10 years, but I have to modify that,” a sports net programming chief told Crupi. “Covid will have a more lasting impact on sports than perhaps we’d anticipated. The networks are not in a great spot right now—along with the battle with distributors, the advertisers are not clamoring to come back.”
Gambling could possibly save the networks. A casino company owns the naming rights and sports betting is thriving, which could offer opportunities to make up for lost revenue for Bally Sports.
NBCSports is also peddling its regional sports networks, but the issues surrounding the Sinclair company puts it out of the running and NBCSports is considering adding them to the subscription-based Peacock service, which would substantially reduce the viewership on those networks.
