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Is Sinclair Going to Let You Stream Your Local Team’s Games for F…

What if you didn’t need an enormous TV bill (or your parents’ login) to watch your local sports teams? It might not be as outlandish as it sounds.

Sinclair Broadcasting Group, perhaps best known to the public as the owner of nearly 200 conservative-leaning local TV stations, recently purchased Fox Sports’ 21 regional sports networks (RSNs) from Disney for more than $10 billion. (Disney chose to sell the networks to speed up the Department of Justice’s approval of its $71.3 billion takeover of 21st Century Fox.) Sinclair was already the biggest owner of local broadcast stations in the country; now it’s the biggest owner of local sports channels, too.

These channels have exclusive rights to 42 teams in total: 14 from the MLB, 16 NBA, and 12 NHL. RSNs are the only way fans in local markets can watch these games, which are some of the most valuable programs on TV. According to Nielsen, these channels garner more primetime viewers in some markets than traditional broadcast networks like ABC, CBS, Fox, and NBC.

That trend doesn’t show any signs of slowing down, either. As on-demand programming becomes more and more central to our viewing habits, sports are live TV’s biggest trump card — the one thing that’s just not the same when DVRed. The television ratings tell a clear story. Back in 1998, sports made up only 25% of the top 100 telecasts of the year. By 2018, that number rose to 88%.

It’s why sports broadcasting deals have exploded in recent years, and it’s the bet Sinclair’s making by purchasing Fox Sports’ RSNs. In a world where appointment viewing doesn’t really exist anymore, sports are the last events that still need to be viewed in the moment — along with their ample commercial breaks.

The future might be free

After news of the purchase broke, Richard Greenfield at BTIG Research wrote, “We believe all major Fox RSN contracts are up for renewal over the next two years.” What we don’t know is what will happen after that. Will Sinclair re-up its cable TV contracts? How will this affect live TV streaming services, which almost all carry Fox’s RSNs?

We may have gotten some clues on Sinclair’s Q1 earnings call on March 9. In addition to Sinclair’s massive collection of local TV stations, it’s also been developing an ad-supported, free streaming service called STIRR. When asked how the Fox RSN acquisition fits into STIRR’s plans, CEO Chris Ripley responded, “We see first specifically from the RSN programming non-game programming being used on STIRR since it is a multi-channel offering.” That’s to be expected. Most free TV streaming sites have a lot of time to fill, and it makes sense that Sinclair would leverage its new Fox Sports content for that purpose.

What wasn’t expected was what Ripley said next: “We very well might populate games as well.” That means your local team’s games could potentially be available on a free platform. It wouldn’t be unprecedented for Sinclair. The company already makes its local TV affiliates available on STIRR, and Ripley said they plan to add “well over 100 channels” to the service’s current 40.

With TV subscribers falling by about 2% per year, offering RSNs for free (or a low monthly bill) could be a way to supplement that lost revenue with advertising money. Take Hulu: It charges $6 per month for its ad-supported plan, but makes more than $15 in revenue on each of those subscribers because the advertising is so valuable. This could be a way to bring young people back into the fold as well, many of whom have completely bailed on paying for live TV, but are more than happy to sit through commercials if it means no bill. According to Business Insider, 44% of 18-34 year olds watch ad-supported streaming services more than any other streaming option, including Goliaths like Netflix and Hulu.

The Bottom Line

Whatever Sinclair decides to do with its RSNs, we’re probably a long way off from seeing them on STIRR. While Ripley said they don’t plan on charging for STIRR in the near-term, he did say that “it’s absolutely on the product plan.” There’s a good chance that live games from 42 teams would be just the sort of prime content that would let them build a paying subscriber base. That said, it’s hard to imagine STIRR going from free to $40 — the cheapest price to access a Fox Sports RSN right now through Sling. Maybe this is the start of paying for only what you want — in this case RSNs. Or maybe it’s just another bloated bundle.

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