Author Topic: Sinclair/Diamond Sports bankruptcy watch  (Read 180 times)

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Offline nfotiu

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Sinclair/Diamond Sports bankruptcy watch
« Topic Start: October 22, 2020, 12:29:51 PM »
https://www.bloomberg.com/news/articles/2020-10-13/u-s-bankruptcy-tracker-media-companies-see-distress-surge

The division of Sinclair that holds the former Fox Sportsnets is in a whole world of trouble.  This article blames COVID, but that is really the least of Sinclairs problems.  Hulu just dropped them all today, YTTV dropped them a while ago.  Traditional cable/sat numbers are falling fast and all the team's contracts are rising.   Nobody is capitulating to their demands for increased fees any more, and they are likely on the verge of bankruptcy.

Basically half of MLBs teams TV contracts are at risk, and this is shaping up to be one of the biggest stories in sports.   There's no way they can model themselves to meet these contracts, and there is no one out there who is going to take them on.

Offline Natsinpwc

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #1: October 22, 2020, 12:33:46 PM »
https://www.bloomberg.com/news/articles/2020-10-13/u-s-bankruptcy-tracker-media-companies-see-distress-surge

The division of Sinclair that holds the former Fox Sportsnets is in a whole world of trouble.  This article blames COVID, but that is really the least of Sinclairs problems.  Hulu just dropped them all today, YTTV dropped them a while ago.  Traditional cable/sat numbers are falling fast and all the team's contracts are rising.   Nobody is capitulating to their demands for increased fees any more, and they are likely on the verge of bankruptcy.

Basically half of MLBs teams TV contracts are at risk, and this is shaping up to be one of the biggest stories in sports.   There's no way they can model themselves to meet these contracts, and there is no one out there who is going to take them on.
Luckily then the Nats are on the Angelos Network!!

Online HalfSmokes

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #2: October 22, 2020, 12:57:20 PM »
https://awfulannouncing.com/mlb/world-series-game-1-draws-a-record-low-9-195-million-viewers.html


even with LA in the series, they drew a horrible number. Baseball on TV is a terrible investment all around. Sinclair potentially having to renegotiate or default on deals heading in a CBA is going to make for an interesting couple of years

Offline OldChelsea

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #3: October 22, 2020, 01:49:30 PM »
Thank goodness for baseball on the radio.

Offline JCA-CrystalCity

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #4: October 22, 2020, 03:58:29 PM »
Why did Sinclair get into the market at all?  Why did they buy the sportsnets?  Was there a plausible argument that they were being undervalued?  Was it a prestige thing to be perceived as a big boy network (like Fox did when it got into the NFL years ago)?

Online HalfSmokes

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #5: October 22, 2020, 04:14:17 PM »
Why did Sinclair get into the market at all?  Why did they buy the sportsnets?  Was there a plausible argument that they were being undervalued?  Was it a prestige thing to be perceived as a big boy network (like Fox did when it got into the NFL years ago)?

people thought sports were going the only value proposition in live tv. That may be correct, but it doesn't translate to overpriced local tv rights necessarily being a good idea. Now that the streaming services are just not paying their rights fees, it's coming to a head. It started with sling dropping sports and some networks- that's why I went to YouTube tv, but they dropped the RSNs too. I'm with hulu now because of youtube's price hike, and I'm happy they are dropping RSNs rather than raise prices. I think the streaming services understand that it's much easier for consumers to jump ship than with traditional cable- a $5 a month price hike may send a streamer to a competitor since the switch over takes about 10 minutes whereas a cable customer with grumble but probably endure it because getting new cable service is a pain in the ass if its even possible.

Offline dracnal

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #6: October 22, 2020, 04:30:27 PM »
people thought sports were going the only value proposition in live tv. That may be correct, but it doesn't translate to overpriced local tv rights necessarily being a good idea. Now that the streaming services are just not paying their rights fees, it's coming to a head. It started with sling dropping sports and some networks- that's why I went to YouTube tv, but they dropped the RSNs too. I'm with hulu now because of youtube's price hike, and I'm happy they are dropping RSNs rather than raise prices. I think the streaming services understand that it's much easier for consumers to jump ship than with traditional cable- a $5 a month price hike may send a streamer to a competitor since the switch over takes about 10 minutes whereas a cable customer with grumble but probably endure it because getting new cable service is a pain in the ass if its even possible.

I'd say that's a pretty solid assessment. Sinclair was late to realize what consumers were going to do and the other networks either foresaw it or dodged a bullet by sheer luck.

Offline nfotiu

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #7: October 22, 2020, 05:07:13 PM »
I'd say that's a pretty solid assessment. Sinclair was late to realize what consumers were going to do and the other networks either foresaw it or dodged a bullet by sheer luck.
They thought they could strong arm themselves into higher fees too, as they have with their local affiliates.   But the cable/sat/virtual companies have all started pushing back because it's made their businesses basically unprofitable.

The virtual MVPDs are only replacing a small percentage of cord cutters.  If you don't have the need for live sports, you can get all your programming on demand for much cheaper usually.  These sports networks can't pay their bills if only sports fans are left on the bundles.

Offline dracnal

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #8: October 22, 2020, 05:17:40 PM »
They thought they could strong arm themselves into higher fees too, as they have with their local affiliates.   But the cable/sat/virtual companies have all started pushing back because it's made their businesses basically unprofitable.

The virtual MVPDs are only replacing a small percentage of cord cutters.  If you don't have the need for live sports, you can get all your programming on demand for much cheaper usually.  These sports networks can't pay their bills if only sports fans are left on the bundles.

Mostly makes sense, but it's the end of another shift with a lot of thinking, so my brain is fried. What's an MVPD?

Offline nfotiu

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #9: October 22, 2020, 06:20:51 PM »
Multichannel video distribution provider.   Traditional mvpds were cable/sat.  Virtual mvpds are the cable replica bundles like YouTube tv, sling, Hulu live.   They seem to be a stop gap during this transition period mostly to try to keep the profitable bundle alive.  But they’re all too expensive now and have probably not the future. 

Online HalfSmokes

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #10: October 22, 2020, 06:27:12 PM »
Hulu isnt bad if you’re subscribing to Hulu and Disney anyway - but we’re a price rise away from dropping it

Offline nfotiu

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #11: October 22, 2020, 07:20:10 PM »
Grandfathered attv works for us for now.  $65 including HBO and masn and more channels than the others.  Not sure how long they’ll keep it around though.   

Offline Elvir Ovcina

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #12: October 22, 2020, 08:19:49 PM »
Sinclair...bankruptcy.


Couldn't happen to a nicer bunch of MFs.

Offline dracnal

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #13: October 23, 2020, 12:25:26 PM »
Multichannel video distribution provider.   Traditional mvpds were cable/sat.  Virtual mvpds are the cable replica bundles like YouTube tv, sling, Hulu live.   They seem to be a stop gap during this transition period mostly to try to keep the profitable bundle alive.  But they’re all too expensive now and have probably not the future.

Ahh, I see. Thanks for the explanation.

Offline hotshot

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #14: October 23, 2020, 09:55:37 PM »
Couldn't happen to a nicer bunch of MFs.
You read my mind!

Offline nfotiu

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  • Juan Soto aka Human Wildcat
Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #15: October 23, 2020, 10:12:16 PM »
You read my mind!

https://www.bloomberg.com/news/articles/2020-10-22/hulu-drops-sinclair-s-regional-sports-networks-in-latest-blow

Here's another article written after the Hulu news.   I'm sure there are others that understand this better than I do.  Can Diamond sports go under without taking Sinclair with them?   What collateral would be backing the secured debt.   It looks like Diamond sports is financed entirely with expensive debt and owes more in sports contracts than they are bringing in, and that gap will escalate quickly.  It's kind of a joke that Sinclair has convinced creditors that there is a bright future for these networks.

With all that going on though, Sinclair's stock has been pretty stable for months.  So that leads me to think they've insulated themselves from Diamond sports and can walk away unscathed if and when they collapse.


Online HalfSmokes

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #16: October 24, 2020, 12:10:26 AM »
Sinclair won’t got down with the ship, but diamond seems like a canary in a coal mine for networks that rely on live local broadcasts. Sinclair owns local affiliates, but if cord cutting continues and Hulu live/sling/YouTubetv/all cease offering live programming, they’re up a creek too

Offline nfotiu

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #17: October 24, 2020, 12:41:31 AM »
Sinclair won’t got down with the ship, but diamond seems like a canary in a coal mine for networks that rely on live local broadcasts. Sinclair owns local affiliates, but if cord cutting continues and Hulu live/sling/YouTubetv/all cease offering live programming, they’re up a creek too
I don't think that relying on live broadcasts is the problem.  Relying on expensive carriage fees paid by millions who don't watch the channel is the problem.  The forced bundle isn't going to translate into the streaming age, and the RSN bundle bubble is going to burst.

Online HalfSmokes

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Re: Sinclair/Diamond Sports bankruptcy watch
« Reply #18: October 24, 2020, 12:56:47 AM »
We’ll see. I know sling has had trouble with local affiliates/networks. On the other hand, you gave cbs, nbc, and abc all having affiliated streaming services that totally cut out affiliates