MLB Could Be Prime To Go Direct-To-Consumer Streaming For Sinclair-Owned Regional Sports Networks

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Sinclair’s broadcaster Diamond Sports Group, which operates Bally Sports’ regional sports network, is on the brink of a Chapter 11 bankruptcy restructuring, and Major League Baseball is selling direct-to-consumer (DTC) streaming and local media rights. to get back.

bloomberg reported “Diamond will likely skip the $140 million interest-only payment in mid-February from about $8.6 billion in debt as it prepares for the Chapter 11 restructuring that will disrupt its $55 billion U.S. sports media business. According to the report, the company has just $585 million in cash on hand and more than $2 billion in media rights payments to 19 regional sports networks spanning the MLB, NBA and NHL. Overall, Sinclair’s purchase includes exclusive local rights to 42 professional teams: 14 Major League Baseball teams, 16 National Basketball Association teams and 12 National Hockey League teams.

Sinclair bought the regional sports network for $10.6 billion as part of a Disney asset sale to pass a Department of Justice request as part of its bulk acquisition of FOX. The Bally-branded Diamond Sports Group soon ran into financial headwinds. In January 2022 they will Signed $600 Million Transaction Assistance Agreement with Lenderit is clear that the company was in a precarious position.

With sports leagues recognizing possible bankruptcy, Major League Baseball has hired former Sinclair and FOX Media Group executive Billy Chambers to new position as executive vice president of local media . Chambers is scheduled to start in MLB on February 1. His primary responsibilities include handling his RSN situation for the Bally Sports brand and all other management and distribution of local media rights. Acquired from Disney by Sinclair Broadcast Group, he served as Chief Financial Officer and Chief Operating Officer for 21 regional sports networks and assisted with the sales process. During his time at Sinclair, Chambers was responsible for finance, legal, business development, transportation and human resources. This is a key indicator that MLB wants someone keenly aware of dire situations and how best to navigate them.

“Billy is an important addition to Major League Baseball and how it navigates the rapidly evolving local media landscape in the future,” MLB Commissioner Rob Manfred said during the announcement in January. “Billy’s extensive knowledge and experience in all areas of regional sports network operations will help the club maximize the game’s reach in the local market.”

Sinclair is expected to consider renegotiating his current contract with MLB, but the league will certainly try to meet their obligations.

Major League Baseball is considering several rights options. One of these options could center around a streaming direct-to-consumer selling model. The league is considered the gold standard in sports streaming due to the experience gained from hosting MLB.TV Premium, the league’s off-market streaming service. Because the league’s tech department is so good, They spun off a completely separate company that was sold to Disney Supports Disney+ and ESPN+.

Given that the infrastructure is already in place and only needs to deal with geolocation, the ability to offer brands for clubs within the league should be seen as a fairly straightforward option.

A potential benefit for consumers is the lifting of the league’s local blackout policy, which is the number one customer complaint, according to MLB.

What is certain is that the bankruptcy of Sinclair-owned RSN is a mandatory feature of such an option. Media rights at the local level, an important source of income for individual clubs in Major League Baseball, are flat at best, but likely to decline as contracts are renewed. MLB has the potential to make a huge leap forward in streaming options for local clubs. Not all 30 do it at once. Options should be considered based on the specifics of each club. Some of them are in the large media market and others are in the small or medium market.

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