Sinclair Broadcast Group shares fell 7.3% to $14.72 a share Monday after a report that sports networks were less interested in buying the company’s struggling regional sports networks.
Sinclair had about $9 billion in debt when it bought 19 Fox regional sports networks from The Walt Disney Co.
The regional sports network’s business has come under pressure as cable cuts have reduced subscriber numbers and the cost of rights to broadcast games continues to rise. Diamond Sports GroupThe Sinclair division, which runs RSNs, reported a loss of $1.124 billion in the third quarter. It also halved its guidance for 2022 EBITA.
Read also: David Preslak has been named CEO of Sinclair’s Diamond Sports Group
To help his RSN, Sinclair launched Bally Sports Plus, a direct-to-consumer application that allows non-cable subscribers to stream games. That puts Sinclair at odds with sports leagues that want to monetize streaming rights for themselves and their teams.
By: New York PostThe National Basketball Association, National Hockey League and Major League Baseball were in talks to buy the Bally Sports RSNs, but those talks are falling apart in light of Diamond Sports’ recent financial disclosures.
Without a buyout from the leagues, Diamond Sports could file for bankruptcy. In the event of bankruptcy, Diamond’s rights agreement could be voided, leaving leagues and teams doing business with Sinclair and Diamond to seek other outlets.
The record says the leagues have brought in investment bankers to help with discussions with Sinclair and Diamond.
It Post quoted a Diamond Sports Group representative as denying that the networks are looking to get out of lucrative rights deals.
“The idea of rejecting MLB contracts is absolutely false. DSG is committed to strengthening and strengthening our relationships with MLB, the NBA and the NHL by fulfilling our contractual obligations and acquiring more rights,” a spokesperson told the newspaper.
He declined to comment on the potential bankruptcy. ■: