More details about Sinclair Broadcasting’s plans to launch a direct-to-consumer streaming service have been announced. The company presented to investors that it projects, in a best-case scenario, the company’s DTC streaming service will have 975,000 paying subscribers by the end of 2022 according to a report by John Ourand from Sports Business Journal.
The projected numbers come from Sinclair’s recent filings with the U.S. Securities and Exchange Commission and the SBJ report goes into further details:
“That’s provided the service launches in April. Sinclair executives have said they plan a soft launch in the second quarter of the year, and a full launch in the third quarter, right before the run-up of the NBA and NHL seasons.
In the worst-case scenario that Sinclair presented to creditors, the platform, which has the rights to stream some local MLB, NBA and NHL games, would have 309,000 paying subscribers by the end of this year.”
Earlier this week, we reported that Sinclair subsidiary Diamond Sports Group and the NBA reached an agreement that will allow Bally Sports RSNs to stream live NBA games in 16 territories, covering 18 teams, which are served by the broadcaster, in what was a major step forward in reaching their April launch date.
Recently, Sinclair secured digital streaming rights for 12 NHL teams, which will help the broadcaster reach its projected DTC subscriber goal of anywhere between 3.446 million and 9.702 million by 2027. The NHL’s 4-year deal combined with the NBA deal is a big reason for the projected rapid growth and why Sinclair was able to secure the $600 million in funding to launch the app.
The SBJ report gives more insight into the details behind the NBA and NHL deals and Sinclair:
“In its most recent negotiations, the NBA pushed for a short-term deal — a series of rolling one-year deals that would allow either party to pull the plug on it after each year. That was a sticking point, as the NBA ultimately agreed to a deal that has similar terms as the NHL one cut the month before. The NBA is receiving a small fee for the games, a source said.”
An important note from Ourand’s report on the deal is that he was told that “Sinclair’s creditors waited until both the NHL and NBA had agreed to sell their streaming rights to Sinclair before they agreed to float the $600 million in financing.”
It’s noteworthy that Sinclair secured funding without reaching a deal with many of its MLB teams. As we’ve noted in the past, MLB rights are looked at as the crown jewel for Sinclair, especially because of the number of games played, yet the broadcaster only has streaming and digital rights for the Detroit Tigers, Kansas City Royals, Miami Marlins, and Milwaukee Brewers.
Ourand’s report states that talks between Sinclair and MLB have reached an impasse. With MLB wanting a stake in Sinclair’s streaming service the negotiations could lead into next season.
According to Ourand’s sources, the app won’t be national, yet it will be more than $20 per month. Before the MLB’s ongoing lockout began, Sinclair CEO Chris Riley said the company had enough content for its DTC streaming app. If a deal is or isn’t reached with the MLB consumers may question the price point of the service.
With their major direct-to-consumer issuers out of the way, Sinclair’s next move is to negotiate a new deal with cable distributor Charter, which ends the first quarter of this year. Back in November, Sinclair reached an agreement with Dish and Sling, however, that deal did not include RSNs