This is How Sinclair is Pitching Their New Bally Sports OTT Service to Investors, And It Has One Big Flaw
Sinclair is setting a high bar for its Direct-to-Consumer Bally Sports App, according to their pitch to investors.
In a Form 8-K filing with the SEC, Sinclair Broadcast Group says it their upcoming direct-to-consumer sports streaming service for Bally Sports, could potentially attract 4.4 million subscribers and generate about $2 billion in annual revenue.
Of those 4.4 million, 2.7 million of those currently have cable or satellite, with about half of them (1.3 million) currently subscribing to a tier with Bally Sports RSNs. The remaining 1.7 million subscribers would be of cord-cutters and cord-nevers.
In total, Sinclair is expecting ~$19.58 in monthly subscription revenue per subscriber. However, with 4.4 million subscribers they expect more than $2B in total revenue from the service. That’s because they expect just under half ($975 million) to come from ads and features.
But it’s missing one major assumption…it’s hiding how many subscribers they may lose if cable and satellite distributors drop the channels.
It sounds like Sinclair is also planning to release two tiers to the Bally Sports streaming service. One that includes live games and one that doesn’t. A “Features Only” subscription plan would include the gaming elements like exclusive betting line, play products, and marketplaces, without live games.
Sinclair argues that the appeal of their service is in its sports content. They provide data that shows many cable subscribers would rather lose all other channels before they lost their sports channels — specifically their RSNs.
But, Sinclair is making a big bet that they can get you to pay all-year long. While they offer games to 43 teams across MLB, NBA, and NHL – not every market has a team for every season. In order to get a fan to subscribe all year round, they more or less need to be a fan of a NBA/NHL team and MLB team in the same market.
Teams on Bally Sports
And, as noted by the rumored price point of $23 a subscriber as reported by the New York Post earlier this month, Sinclair is banking on devoted sports fans subscribing to the app and enjoying all these features all in the name of supporting the home team.
If they do, they feel it will likely be because sports fans will begrudgingly pay Sinclair’s hefty $23 subscription fee to watch their teams — mostly because they won’t have any other options to stream, except illegally or with an out-of-market package with a VPN.
The only Live TV Streaming Service to offer Bally Sports is AT&T TV after Sinclair couldn't come to terms with both Hulu Live TV and YouTube TV after their deals expired.
In short, Sinclair is banking on its reputation as a curmudgeon in the cable and satellite space to secure big subscription numbers for its DTC app.