After locking in the local streaming rights for live NHL and NBA games, Sinclair’s Diamond Sports Group now appears to have the requisite must-see sports content to populate its upcoming direct-to-consumer service. But if a recent filing with the U.S. Securities and Exchange Commission is anything to go by, the owner of the Bally Sports RSNs is eyeing a monthly subscriber fee that is considerably more costly than what other streamers are charging.
According to the three Goldilocks scenarios outlined in the 8-K quarterly report Sinclair filed Jan. 13, the most advantageous scenario would find Diamond Sports lining up as many as 975,000 streaming subscribers by year’s end. (All projections are based on the assumption that the DTC service will launch in April.) Given Sinclair’s estimate that those early adopters would generate $237 million in streaming revenue, the average monthly sub fee would work out to around $20.25 per customer.
Similar outcomes are apparent upon examination of the least felicitous scenario outlined in the 8-K doc. In the bed’s-too-hard, porridge’s-too-cold rundown, 309,000 subs sign up for the DTC service between the April launch and Dec. 31, a turnout that would result in $75 million in streaming revenue. This forecast also leads to a likely $20.25 monthly streaming bill.
The rates outlined in Sinclair’s filing are predicated on Diamond’s ability to stream NHL and NBA games in its affiliated franchises’ local markets. The fees are expected to be adjusted upwards as Diamond renews its legacy distribution deals with its member MLB teams. The Bally Sports nets have distribution deals in place with 14 MLB clubs, but only four of these (Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers) have signed off on a streaming agreement.
Sinclair CEO Chris Ripley in 2021 refuted reports that the company was eyeing a $23 monthly fee, although he declined to provide any further information about the hypothetical price target.
Whatever number Sinclair has in mind, the $20.25 fee mined from last week’s SEC filing would be considerably more expensive than the other active DTC products on the market. By way of comparison, ESPN+ ($6.99 per month) costs about one-third as much, and the something-for-everyone Disney bundle (ESPN+, Disney+, Hulu) weighs in at $13.99.
Other established streaming services, including the ad-free Peacock Premium (NFL, Olympics, WWE Network) and the top-tier Paramount+ package—which includes NFL, NCAA basketball, PGA golf and UEFA Champions League action—charge a monthly sub fee of $9.99.
While armchair economists will take great pains to point out that $20.95 is a good deal less escarole than a mid-tier, sports-friendly basic cable subscription ($74.99 per month, before they stick you with rental costs and other hidden fees), this is pretty much an Eli-Manning-to-Eli-Lilly comparison. If you’re a superfan who lives in the zone served by Bally Sports Detroit, you’ll be able to gorge on Pistons, Red Wings and Tigers streams to your heart’s content as soon as the Diamond DTC drops. But if you jettison your Xfinity account once the streaming service comes online, you’re basically forfeiting your ability to watch any national sports programming—unless you feel up to installing a roof-mounted VHF/UHF aerial.
On a related note, an American dies from a fall from a roof every 3.4 days. No such thing as a free lunch.
Speaking of Big Cable, while Sinclair’s recent $600 million financing deal and concomitant NBA renewal will go a long way toward greasing the wheels for its DTC launch, the programmer still has a few distribution headaches to deal with in the new year. While Sinclair’s broadcast division renewed its carriage agreement with Charter last spring, its standalone RSN deal is set to expire before March 31.
Charter’s Spectrum is the nation’s second-largest cable-TV brand, serving 15.3 million residential video subscribers as of the end of the third quarter of 2021. Negotiations are underway, although given the explosive rise in sports carriage fees, the already-fraught process of renewing deals is more contentious than ever before.
The Diamond RSNs have been dark in 8.42 million DISH Network homes since before Sinclair closed its $9.6 billion acquisition of the 21 former Fox Sports channels in August 2019.
