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Sinclair CEO Says Bally Sports DTC Product Still On Track for First Half 2022

Michael King

During their 2Q 2021 Earnings Call on Wednesday, Sinclair president and CEO Chris Ripley said the company remains on track for an introduction of a direct-to-consumer local sports product during the first half of 2022. There is the question, though, whether they would even be able to launch such a service.

“We continue to push forward on our business plan and have made many key hires as we march toward our initial product launch date,” he said. He reiterated that the company has “the right to do that from the distributors. We do have to…complete our renewals for the NHL and NBA, and there are several teams that on the MLB side, which we have to secure the DTC rights for.”

Ripley however did not provide an update on pricing, however, the company has been pitching investors that they would earn about $1.025 billion in subscription revenue with 4.4 million subscribers, based on recent paperwork filed with the SEC. With that number of subscribers, it would cost subscribers about $19.50 a month for the service — a figure that is well above monthly fees for Netflix, HBO Max, or the Disney Bundle that includes Disney+, Hulu, and ESPN+. Additionally, that assumes that all subscribers would stick around for an entire year, rather than come and go - which could potentially push that subscription price even higher.

On pricing though, Ripley said on the call, “everything is still subject to change and final pricing plans and packaging is still something that is yet to be finalized.”

Ripley believes that the company will be able to acquire net new direct-to-consumer subscribers, who no longer subscribe to a cable bundle, rather than cannibalize it. He believes that the wholesale price will continue to be a good value for cable, satellite, and Live TV Streaming distributors.

He also feels that while subscription revenue is part of the equation, a direct-to-consumer subscriber can be more lucrative than a cable one.

“The economics of monetizing a DTC user is different from your traditional linear local sports viewer. Having fans access to via an app that is on our platform gives us a direct line to the viewer and as a result unlocks a whole set of opportunities to engage and monetize these consumers, given the direct relationship with viewers, we’re able to create a Metaverse or marketplace, where we can serve up a more personalized and optimized experience for the viewer,” said Ripley.

The suggested $23 figure was first mentioned in early July, which pointed out that subscribers would only have access to the Bally Sports network in their home market. That number was soundly denied by Sinclair CEO Chris Ripley in an interview with the Baltimore Business Journal.

In the SEC filing, Sinclair pointed out that the new Bally streaming service would include gaming, sales of fan-based merchandise, ticketing, collectibles, and other sports-related features, in addition to the singular provision of streaming sports programming for viewers.

He also said that viewership for their regional sports networks was outperforming viewership for the NBA, NHL, and MLB levels in 2019.

“This really underscores the power of local content,” Ripley said. “There’s no question that video consumption habits have and are continuing to change with people opting to consume content outside of traditional linear channels. So we need to be able to provide them with content however and wherever they want to receive it.”

Last month, reports emerged that Sinclair had entered a bid for the NBC Sports portfolio of regional sports networks, which cover a large swath of the nation that is not already covered by Bally Sports RSNs.

In particular, Sinclair could look to grab these RSNs and add them to their catalog of stations, giving them access to the coveted New York, Philadelphia, Washington, D.C., Boston, and Chicago markets, among others. A report from the New York Post says that the “preliminary offer” came ahead of any financial details during the first part of an auction for the networks.

The decision for Sinclair to be involved in the process is to give the company more leverage with cable and satellite distributors, to carry their full portfolio of local channels and Regional Sports Networks. The company has also planned to launch direct-to-consumer streaming access to the RSNs ahead of the 2022 baseball season, but has faced pushback from distributors.

Sinclair bought Fox Sports RSNs for $10.6 billion in May 2019, after it was divested from Disney after their acquisition of 21st Century. In July 2019, both Dish Network and Sling TV dropped the channels from their service. Then, last year, YouTube TV, Hulu Live TV, and fuboTV dropped the RSNs.

Bally Sports RSNs are currently only available to stream on AT&T TV/DirecTV Stream. The NBC Sports RSNs still have wide distribution across Live TV Streaming Services. While they were dropped by Sling TV earlier this year, they are available on AT&T TV, Hulu Live TV, fuboTV, and YouTube TV.

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