Regional sports fans have been frustrated in recent months as Sinclair’s Bally Sports networks are currently only available on AT&T TV. We know that the company is working on a direct-to-consumer streaming service, but how much might that cost?
Cost Consideration #1 - The Cost of Sports
The biggest issue with any standalone sports streamer is the fact that sports leagues are charging an absolute premium for their product. For example, the non-Bally Marquee Sports Network pays the Chicago Cubs $130 million for their rights every year, but only 175,000 households may watch the games. That means the break-even cost would be $62/month for a year-long subscription. Would fans be willing to pay such a premium? That cost also wouldn’t cover whatever Sinclair will spend on its technology, maintenance, and support staff to operate the software on the back-end.
Charging $50-70/month feels like an absolute nonstarter, but the economics may not work out otherwise. However, if the price would be so overwhelming, it’s hard to imagine Sinclair would announce its plans for the service without some idea to make it more reasonable.
Sports are often cited as the number one cost for any cable or streaming company. Part of the reason you can get Philo for just $20 is that the service doesn’t even try to offer sports.
Cost Consideration #2 - Competition
When it comes to sports there aren’t too many standalone streaming services to consider. ESPN+ is $5.99/month, but its live streaming options aren’t remotely comprehensive.
Season-long packages like MLB.TV run $24.99/month or $109.99-$129.99 for an entire season. NFL Sunday Ticket TV is $299.99. NBA League Pass is $199.99 and NHL.TV is $99.99 per season.
If we average out the monthly cost of those “big four” sports league packages, it comes out around $15. That would be on the higher end of competing monthly streaming subscriptions, but that seems far more reasonable, considering the unique value of these channels.
Cost Consideration #3 - Add-on Comparisons
With AT&T TV, adding the Bally RSNs would cost an additional $15/month. Many other live streaming services offer a bundle of sports networks for around $11/month. That said, those services benefit from the underlying basic service subscription cost. These services also need to maximize value without pricing the service outside the reach of most viewers. So it’s not like we could separate one channel and slap a price on it.
Cost Consideration #4 - Historical Precedent
When we look back at nearly every streaming service, its initial launch is often priced at a steep discount. Disney+ offered fans a rock-bottom deal if they signed up for a multi-year subscription, and even Netflix’s initial online viewing cost was a fraction of today’s price. This leads us to believe that a Bally Sports subscription might start low and increase as quickly as one year later.
Sinclair has a vested interest in getting people hooked on the product, so a price too high might be a barrier to entry. It would take a long time to recover if the initial cost were set beyond what the market can bear.
Cost Consideration #5 - Partnership Considerations
AT&T TV must be enjoying its exclusivity right now, but if Bally Sports breaks away, you can imagine they’d be less than thrilled about a partner becoming its competition. That said, additional revenue from the standalone Bally Sports app might make the company more willing to revisit negotiations with other potential partners like YouTube TV or fuboTV. If Sinclair is pulling in revenue from those other sources, it could lessen the need to charge an absolute premium for its standalone service.
Sinclair might be content to bleed some cash for a year or two while it builds its subscriber base, but the staggering costs of these sports leagues are an obstacle that will be difficult to avoid. Our prediction is an initial fee of $39.99/month, but subscribers should expect rate hikes early and often.