Sinclair Broadcast Group, a Hunt Valley-based TV station owner, dismissed as “speculation” a report that it’s trying to sell its Diamond Sports unit to three professional sports leagues, even as plans were confirmed Thursday for the launch of new regional sports streaming services around the country next week.
Sinclair bought the regional sports networks for $10.6 billion in 2019, but they were hit hard by pandemic-related disruptions and “cord cutting,” in which many fans have abandoned traditional cable TV.
Sinclair broke Diamond off from its financials earlier this year, putting it in a separate unit, and reportedly hired investment bankers this summer to assess options for the sports broadcasting business. Diamond owns 19 Bally Sports Regional Sports Networks, formerly Fox regional sports networks.
In its statement Thursday, Sinclair dismissed a New York Post report that Major League Baseball, the National Basketball Association and the National Hockey League may orchestrate a buyout of Diamond.
Diamond, the newspaper said, “has been hemorrhaging cash and could be headed for a possible bankruptcy filing if it doesn’t find a white knight in the coming months.”
In its response, Sinclair said that “speculation raised by anonymous sources is just that, speculation.”
The company said it was moving forward with “the full launch of our direct-to-consumer product on September 26 heading into the start of the NBA/NHL regular seasons.” It said it has “the full support” of the teams and the two leagues.
Diamond will launch “Bally Plus” — a direct-to-consumer streaming service — in 14 NBA and NHL markets on Monday prior to the opening of the basketball and hockey seasons, Sinclair said in a written statement Thursday.
Diamond launched similar streaming options in June in the markets of five Major League Baseball teams: Tampa Bay, Miami, Milwaukee, Kansas City and Detroit. But — because Diamond has only received streaming rights from those five teams — its offerings are limited in the summer when baseball is the dominant sport.
An MLB spokesman declined comment on Thursday.
The Orioles’ and Washington Nationals’ games are broadcast locally by the Mid-Atlantic Sports Network, which is majority-owned by the Orioles. MASN can be livestreamed only as part of a broader subscription package that includes the network.
Sinclair Broadcast Group President and CEO Chris Ripley said in June that the launch of the “Bally Plus” streaming services this fall would mark an important turning point for the company.
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“We’re going to be servicing a huge amount of fandom which is already outside of the pay TV bundle,” he told The Baltimore Sun. “And that’s where the real innovation is going to happen.”
Ripley said he envisioned the services becoming increasingly interactive by, for example, allowing fans to socialize online, buy tickets or gamble in states where sports betting is legal.
But the company still needs to overcome the lingering effects of overpaying for the networks in 2019, said Karyl Leggio, a Loyola University Maryland finance professor.
“This appears to be a case of a winner’s curse,” Leggio said. “Sinclair overpaid for the rights to broadcast regional sports at a time when cord cutting was increasing. Sinclair did not accurately forecast the impact of cableless customers on its revenue model.”
Leggio said the sports leagues were positioned to receive “bargain basement prices” for local broadcast rights.
The leagues, he said, could “get a smashingly good deal on purchasing the rights to regional sports. This is a distressed dirty situation.”
Shares of Sinclair’s stock closed down 90 cents each Thursday at $20.92 a share, less than half of what they were after the company bought the sports networks in 2019.