Major League Baseball and the Major League Baseball Players Association have failed to reach a new labor agreement and are experiencing their first lockout in 27 years. The certainty of the future of America’s Pastime may be up in the air but while speaking at the Bank of America Leveraged Finance Virtual Conference on November 30, Sinclair Broadcast Group CEO Chris Ripley says his company has enough streaming rights to launch the anticipated Bally Sports DTC streaming app, while speaking at the Bank of America Leveraged Finance Virtual Conference
However, Ripley is aware that the MLB lockout could dampen those plans. “I don’t have any insight into the labor negotiations there, but if the season is delayed, we won’t have key tentpole products to support both our linear channels and any new DTC,” Ripley said. “That definitely could have an impact on the start,” according to the report.
Back in November, it was reported that Sinclair only had DTC streaming rights for 4 MLB teams and their NBA streaming rights had expired. Ripley addressed this during the conference, saying, “I do think there will be some news around some of these renewal negotiations shortly.” Ripley stated that Sinclair and the Bally Sports RSNs are in ‘active and ongoing negotiation,” with the National Hockey League and the National Basketball Association for streaming rights. If Ripley can successfully negotiate with the leagues, then it stands to reason that the Bally Sports DTC streaming app could meet its 2022 goal.
Diamond Sports Group, the subsidiary of Sinclair that technically owns Bally Sports RSNs, is considered “Sinclair’s Achilles Heel” and has been subject to bankruptcy rumors. The financial aspect could be a major factor in the DTC service, as MLB reportedly wants a stake in Bally Sports RSNs streaming service.
MLB Commissioner Rob Manfred did not pull any punches while speaking at the World Congress of Sports earlier this year:
“The other set of rights they’ve talked a lot about is gambling rights,” Manfred said, “they don’t have those either. We have been clear with Diamond from the very beginning, this was not a late starting issue. We’ve been very clear with them from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we’re not just going to throw them in to help Sinclair out.”
Bally Sports RSNs and Distributor Woes
Due to Sinclair’s constant hardball with traditional TV distributors and streamers, fans are missing out on watching their local teams. There have been out-of-box approaches such as Mavericks owner Mark Cuban spending $2 million of his own money to help subsidize the costs to allow fans to stream Mavs games on Bally Sports Southwest via DIRECTV STREAM.
Recently, Sinclair reached an agreement with Dish to carry Sinclair Locals and Tennis Channel, however, the RSNs were left out. Ripley did address the negotiations with Dish at the conference making it clear that he was happy that there wasn’t a disruption in service for Dish customers, according to the Next TV report.
“We had a very lengthy, complex and difficult negotiation with Dish,” Ripley said at the conference. He continued, “The challenge with them is the RSNs have been off for two years and they have dropped every RSN from the portfolio that they could. So it was not going to be possible to get there.”
Ripley did make it clear that it’s “always a possibility” that Sinclair and Dish could negotiate over RSNs in the future but Sinclair’s current focus is with distributors that don’t carry any of the RSN channels.
Sinclair’s Focus on Interactive Gambling, and Gamification in Digital Media
As sports make the shift to streaming, fan interaction and gambling is becoming more important for digital properties. After completing their rebrand under casino owner Bally’s, Sinclair is prepared to launch their first gambling-oriented product, “Watch and Play,” which will be centered on tennis. From the Next TV report on the conference:
“The solution is to make it interactive. That’s the type of experience the younger generation is looking for,” Ripley said, adding that the idea is to offer younger viewers a lean-forward experience, with exciting graphics and rewards for watching in addition to the betting option. “Once we roll out a tennis ‘Watch and Play,’ we’ll move on to other major sports. We’re really excited about giving the consumer an integrated, exciting, interactive live betting experience. That’s probably one of the biggest things we’re working on with Bally’s.”
Since younger viewers are known to be interested in highlights and clips of games, leagues and new media companies have been trying to gain younger audiences by creating ways to make sports shorter and more interactive. Buzzer with NBA League Pass integration launched earlier this year, which allows fans to watch the games, or moments and interact with friends.
Earlier this year, fuboTV launched free-to-play games during the CONMEBOL World Cup 2022 Qualifiers, which allowed fans to play games while watching the soccer match. In the near future, fuboTV plans to expand the service with in-game wagering via the Fubo Sportsbook. Back in November, Amazon’s Prime Video incorporated X-Ray fan polling in Thursday Night Football which the service plans to expand in the upcoming months.
The MLB Lockout and the Future of Sports and Streaming
The MLB lockout could hold all the cards when it comes to insight on how streaming will affect the future of sports. Ripley mentioned that if the lockout leads into the season then it would be a problem for the launch of Bally Sports DTC. Being that the RSNs are already on life support due to cord cutting, and MLB is the crown jewel of RSNs, any type of delay in the MLB season could create a dire problem for any RSN.
While speaking on The Dan Le Batard Show with Stugotz podcast, former Miami Marlins President David Sampson gave some insight on how lockout negotiations work from a team media standpoint. Samson stated that team broadcasters are promised a minimum of 150 games. When asked if decreased revenue from RSNs would be a concern during negotiations, Samson said the following:
“It’s a bigger concern for the players because generally in baseball the players have gotten around 50% of the revenue in payroll, and that’s been pretty consistent over the years. So, if the revenue goes down, whether it’s through a pandemic or smaller broadcasts deals, that will certainly impact salaries.”
Samson speculated that it probably wouldn’t be a matter of broadcast fees going down, instead, it is a matter of how the broadcasts are made available to the consumer.
With Manfred and the MLB wanting to have a stake in Bally’s Sports DTC app, it’s a matter of time before the leagues and teams start cutting out the middleman and selling the product directly to fans. Right now, leagues lack the infrastructure, which is why the RSN model is still in existence. However, the NHL is allowing fans to watch out-of-market games via ESPN+ and Hulu; MLB and the NBA have MLB.tv and NBA League Pass, respectively. The MLB also airs games on YouTube which helps the game appeal to younger viewers
Amazon has reportedly placed a bid for the NFL’s media properties, so it wouldn’t be out of the question if they partnered up with the other leagues by using their Prime Video infrastructure to put games in the hands of fans.
If these leagues eventually do partner up to create their own in-market subscription service or broadcast games on an established platform then fans will be the real winners, as they’ll be able to watch their favorite team from anywhere on any device.
In the not too distant future, media rights in sports will likely be a lot more digital-friendly, which means Sinclair’s Bally Sports RSNs has to adapt — before its game over.