Sinclair Broadcast Group Inc. remains on track for a soft launch of in-market streaming with select Major League Baseball teams by the end of next month, with pricing expected at $19.99 per month or $189.99 annually, CEO and President Chris Ripley told analysts on the company's May 4 earnings call.
Sinclair subsidiary Diamond Sports Group LLC's 19 regional sports networks hold in-market streaming rights to five MLB teams, 16 NBA squads and 12 NHL clubs. The company has yet to disclose to which MLB teams it holds in-market rights, but the teams are widely believed to be the Miami Marlins, Detroit Tigers, Kansas City Royals, Tampa Bay Rays and Milwaukee Brewers.
The second-quarter streaming rollout will be a soft launch, followed by a more heavily promoted scale-up in September. Ripley said the initial direct-to-consumer product will offer an experience similar to what viewers now screen on authenticated TV Everywhere offerings.
In the months after launch, Sinclair anticipates adding an enhanced streaming product with additional functionality, content and features. The enhanced product will afford incremental ways "to monetize the viewer through a more personalized and interactive experience," CEO Ripley said May 4.
At the announced pricing, the company said it expects average revenue per user of $18.50.
Bally Sports and the clubs have received significant email traffic asking when the service will launch. "So there is that pent-up demand," COO Robert Weisbord said. "We look forward to joint marketing efforts with the teams."
Diamond has been able to secure the okay for in-market streaming in renewing recent rights deals with the MLB teams. Asked about adding more MLB clubs to its in-market streaming roster, executives said constructive discussions continue with other MLB teams and the league itself.
Reports indicate MLB also has an interest in starting its own in-market direct-to-consumer offering next season.
Sinclair's streaming update comes as Diamond Sports, which owns the company's 19 RSNs, has been deconsolidated from Sinclair's financials. Diamond recently closed on a $635 million financing arrangement that is earmarked in large part to fund the streaming game plan. It also named a new board.
Sinclair CFO Lucy Rutishauser said on the call that after March 1, Diamond Sports and Marquee Network, the company's joint venture with the Chicago Cubs, are being accounted for as equity stakes. The company filed pro forma financial statements for the year ended December 31, 2021, with the SEC that reflect the deconsolidation of Diamond as if it had occurred as of January 1, 2021.
Beginning with the next quarter, Sinclair and Diamond will hold two separate earnings calls, Rutishauser said.
In recapitalizing the Diamond Sports Group in March, Sinclair realized a $3.4 billion noncash, pretax gain in the first quarter, helping to push its earnings to $2.59 billion, or $35.39 a share, and reversing a $12 million loss, or 16 cents a share, in the first quarter of 2021.
Total revenue declined 15% to $1.29 billion from $1.51 billion
