Sinclair is raising $ 250 million for the new sports streaming service, sources said


Sinclair Broadcast Group is quietly raising money for a new service that will deliver games to fans over the Internet, including games of the St. Louis Cardinals, the Dallas Mavericks and many other popular sports teams, The Post reports.

With LionTree Investment Bank, a mass-market media company with exclusive rights to broadcast games to dozens of teams in baseball, the National Basketball Association and the National Hockey League, it has raised more than $ 250 million for the company. is working on a plash. information about plans.

Sinclair told hedge funds and other potential investors that he had set a goal of paying $ 23 a month from fans who wanted to show the games in markets that own sports broadcast rights.

Fans living outside Sinclair’s 21 communities, which have broadcast rights to 42 teams, were probably left unsuccessful.

The service, which Sinclair hopes to launch from the start of next year’s baseball season, will be a huge inconvenience for fans of the game changer and the cable industry.

“It’s a big, important event,” the non-Sinclair-based broadcast operator’s director told The Post. “And if Sinclair is successful, it will change the industry faster than I imagined.”

Sinclair declined to comment.

Liam Foudy # 19 Columbus Blue Jackets
In 2019, Sinclair paid $ 9.6 billion for 21 regional sports networks owned by Fox, giving it exclusive rights to dozens of teams, including the NHL’s Detroit Red and Columbus Blue Jackets.
NHLI via Getty Images

While the NBA is offering a League Pass for out-of-town fans, there are limited streaming options for city fans to watch their local sports teams via cable. This is because for decades, sports teams have sold the rights to broadcast their games to TV companies such as Fox and Sinclair, after which they have been paid by cable and satellite TV operators to distribute the games to their customers. they get.

Sinclair paid $ 9.6 billion for 21 regional sports networks owned by Fox in 2019, giving it exclusive rights to 14 MLB teams, 16 NBA teams and 12 NHL teams.

At the time, news of the deal boosted Sinclair shares by 35 percent. But the investment has been a problem ever since, as cable operators suffering from wire cuts seek to reduce the amount they pay to broadcast these games.

YES network reporter Meredith Marakovitz was interviewed by Yankee first head coach Greg Bird on the field after the game in Florida.
It is not clear whether Zinc’s flow service will include YES after it was run by the Yankees.
Corbis / Icon Sportswire via Getty Images

In recent years, tensions between cable operators and broadcasters have become so heated that the Dish satellite TV operator stopped paying for rights to the Sinclair Games altogether in July 2019 – giving customers Dish subscriptions faster than ever before. the right pledge not to throw.

Even without sports streaming, eMarketer estimates that by 2024, more than a third of U.S. homes will not have cable or satellite service.

Sinclair also owns 20 percent of the YES network, which broadcasts the Yankees and Brooklyn Nets games. It is not clear whether Zinc’s flow service will include YES after it was run by the Yankees.

The logo of the Dish satellite TV network on the smartphone is shown in this photo.
Satellite TV operator Dish has suspended payments for rights to Sinclair games altogether in 2019, highlighting the tensions between cable operators and broadcasters.
LightRocket via Getty Images

This year, the Yankees plan to show 21 of 162 Yankee games for the first time through Amazon Prime. Fans who want to watch these games should only have Prime, not over cable.

But this is a unique thing. Most sports fans are forced to subscribe to cable.

While it is very difficult to stream $ 23 per month because of the combination of Disney + and Netflix, it is cheaper compared to the monthly cable fee.

For example, fans of Indians and Cavaliers in Cleveland have to pay AT&T $ 85 per month to access these games through Sinclair’s Bally Sports section. At $ 23 a month, they cut their spending by more than two-thirds.

Of course, Sinclair will have to negotiate with the NBA, MLB and NHL to secure the right to broadcast the games, sources said. These negotiations have not been completed and sources say Sinclair is now raising money to show that he has the funds to support his ambitious venture.

“I think the probability of this happening is over 50 percent,” said one source, acknowledging that there are too many moving parts.

The Te Disney Plus logo is on the smartphone, while the Netflix logo is shown in the blurred background in this photo.
Sinclair’s sports streaming service is expected to cost $ 23 a month – the same as Disney + and Netflix.
SOPA Images / LightRocket via Getty Images

If it succeeds, it plans to have 4.4 million customers by 2027, or more customers than YouTube TV or Sling at the moment, the source said. The company also plans to decontaminate its current subsidiary by 2024, the source added.

Sinclair is also expected to seek rights to off-market games, although this is more difficult, the source said. If he has these rights, he may be charged a little extra for these games.

Sinclair had 52 million cable subscribers by the end of 2020. However, as revenue from cable operators declines, there is a risk that some of these customers will be deprived of payment for the 2019 sports investment.

Last year, Sinclair’s annual revenue was $ 1.89 billion, adjusted, less than the $ 2.6 billion it expected Fox would earn in 2019 when it bought regional sports networks. At the moment, the $ 8 billion it borrowed to help buy it is under water, with the smallest debt sale at 60 cents a dollar.

The plan is to allocate the broadcasting rights to the new subsidiary and use the proceeds from the streaming service to help pay its creditors, the source said.

Now the question is whether the leagues will correct the plan or how it will affect the teams.

Greg Bouris, director of sports management at Adelphi University and former communications director at the MLB Players Association, said that if Sinclair proves successful, teams could suffer at least a short-term loss because of the low revenue coming from cable providers. .

“I think the economy is going backwards and that can be very frustrating. If I had a team, I would be a little nervous.”

But it would definitely be good for the fans, he said.

“If you go to the hand card, then less is more. I’ve seen it really benefit the consumer, ”he said, adding that he no longer has to have cable TV to watch his local communities.

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