How much is direct access to most Cardinals and Blues telecasts, as well as some St. Louis University men’s basketball games, worth to you?
Ten bucks a month? Twenty? Fifty?
The New York Post recently reported that Sinclair Broadcast Group officials have been telling potential investors that the company plans to charge $23 a month for its regional sports networks when it starts selling them directly to consumers next year via video streaming. That probably would be by the beginning of the baseball season — that is, if MLB solves its labor problems and indeed starts play on time.
But Sinclair CEO Chris Ripley disputed that, according to the Baltimore Business Journal.
That number is inaccurate, and I can’t comment on what the ultimate pricing will be,” he told that publication, adding that market research is underway to find a “fair price.”
It would seem the landing spot would be somewhere in the $20-$30 per month range that Sinclair would charge consumers for unencumbered access to the 19 sports television outlets it owns nationwide. That includes Bally Sports Midwest, which serves the St. Louis market. Currently, a subscription to a program provider that carries the network — such as Spectrum (Charter), DirecTV, AT&T U-verse, Cable America, Fidelity and Vast in the immediate St. Louis market — is needed to receive the games.
The pluses: This plan would allow consumers to bypass that requirement. It would make the games available to people who do not buy any TV service or have one that does not include a Sinclair sports network (Dish, Hulu Live, FuboTV, Sling TV and YouTube TV.)
The minus: This figures to be much more expensive than the major streaming services — in fact Hulu, HBO Max and ESPN+ combined can be purchased for about $22 monthly. Getting content piecemeal leads to a lot of individual shopping for programming, rather than the simplicity (albeit usually more costly) traditional cable/satellite packages.
This obviously does not sit well with those programming providers now carrying the regional sports networks. Although Sinclair would be expected to continue to make the games available to them, those companies undoubtedly would lose some subscribers if their viewers can bypass them. Sports Business Journal reported this week that two unnamed such operators have threatened to drop the Sinclair sports channels if the company establishes the direct-to-consumer plan. That could have a huge impact.
Sinclair officials declined to comment Thursday. But there already have been delays in getting the plan implemented.
Sinclair has been promising to offer its sports networks à la carte since last fall, when Ripley said: “We have a pretty aggressive plan. It will happen next year (2021).”
But that apparently was too ambitious, because in February he pulled back and said the direct-purchase option “is expected to launch in 2022” and in May updated that to “the first half of 2022.”
It is imperative for Sinclair to get this up and running because it now has a product — sports telecasts — for which it pays a lot of money but isn’t delivering to many people who want it because of bickering with multiple programming providers over the amount Sinclair demands to be paid. These services have determined that it is more beneficial to lose customers who go elsewhere for this sports programming than to pay the required rate.
The danger is twofold. Viewers who have discovered they can live without these telecasts not only affect the ratings, which impacts Sinclair, but in theory can become less interested in sports. In the long run, that hurts the teams doing business with Sinclair.
It has been estimated that only about 10% of the total audience that had been receiving what now is Bally Sports Midwest before the distribution issues began cropping up in recent years has been affected. And the argument can be made that those who really are interested in the teams have switched to a service that shows the games.
But in this era, with traditional television viewership rapidly declining, any extra nudge by those who are providing the content is massively counterproductive.
How bad is it? As previously reported in this space, Ripley said in the spring on a conference call with financial analysts that Sinclair wasn’t even reaching 50% of its potential customers nationally. He said that at the end of 2020 those regional sports networks were in about 35 million households, “less than half of the total subscribers possible” in the areas they serve.
He is well aware of the problems — and viewer frustrations.
“Consumers make the choice on how they watch the games,” Ripley said then. “And we and the teams desire to make the programming as accessible as possible, something that today, unfortunately, is not ideal. ... It is imperative that Sinclair be able to fill that void and provide consumers the sports programming they desire most in a way they choose to access it.”
Meanwhile, no resolutions seem on the horizon to the current disputes between Sinclair and the providers that no longer carry its regional sports networks.
Phillip Swan, who writes about the television and technology business on his informative tvanswerman.com blog, recently responded to a question about the topic when asked if there were any new developments in Sinclair’s rift with Hulu Live and YouTube TV.
“Not as far as we know, and that’s bad news if you’re hoping for an imminent solution,” he wrote. “Both ... have gone without the regional sports channels during the entire 2020-2021 NBA season, and the first 10 weeks of the 2021 MLB season. It’s likely that most Hulu or YouTube TV sports fans who would have dropped their service due to missing the Bally Sports channels would have done so by now, at least in the markets where the channels are available. So there’s less pressure on Hulu and YouTube TV to make a deal now.”
The same could be said for the other programming providers who have dropped Bally Sports Midwest and similar networks.
“That doesn’t mean a settlement is out of the question,” Swann continues, “but it does suggest the two streamers are content to play hardball until Sinclair lowers its price. (And that may never happen.)”