• by Karlene Lukovitz  @KLmarketdaily, November 19, 2020

Sinclair Broadcast Group — which sustained a $4.18 billion operating loss in Q3 due to the financial straits of its regional sports networks — may have found a solution in a partnership in which the RSNs and its other networks will serve as a foundation for Bally’s’ push to become an omnichannel gaming platform.

The 21 Fox RSNs will be rebranded under the Bally’s name. (“Bally Sports,” according to New York Post sources.)

Under the long-term agreement, Sinclair will have warrants and options to own a minority stake in Bally’s, and Bally’s will have rights to integrate content across Sinclair’s 190 TV stations and sports networks, its STIRR direct-to-consumer streaming app, Tennis Channel, and digital and over-the-air television network Stadium.

Together, Sinclair’s properties span 88 markets, allowing the companies to jointly market, design and integrate products on a state-by-state basis, as well as deliver online gaming experiences to local audiences.

Bally's and Sinclair will “create unrivaled sports gamification content on a national scale, positioning Bally's as the premier omnichannel gaming company with physical casinos and online sports betting and iGaming solutions united under a single brand,” states the announcement. “The transaction is expected to position Bally's to capture a significant share of the fast-growing U.S. sports betting and iGaming market.”

Over the 10-year term, Sinclair's RSN portfolio will receive annual naming rights fees and a committed percentage of Bally's Interactive's marketing spend.

The new partnership, along with Bally's’ acquisition of the Bet.Works' iGaming platform, its growing market access and its physical casinos footprint (soon to include 10 states) position Bally's to "capture a significant share" of the U.S. sports betting and iGaming market.

Over the 10-year term, Sinclair's RSN portfolio will receive annual naming rights fees and a committed percentage of Bally's Interactive's marketing spend.

Chris Ripley, president and CEO of Sinclair, said that the company had been exploring the gaming opportunity for some time.

"Since acquiring Tennis Channel a few years ago and the RSNs last year, we have been working on developing an innovative experience that changes the way people think about and view live sports across all our platforms,” he said. “Bally's, with its strong brand name, premier sportsbook technology platform and expansive market access, is the perfect partner to help us change the paradigm of sports viewing across all our assets.

"By integrating gamification elements that allow audiences a more personalized and interactive game experience, consumers of live sports in the future can look forward to a more dynamic and engaging sports viewing experience. With the U.S. sports betting and iGaming market expected to ultimately reach [about] $50 billion at maturity, this partnership perfectly positions our sports portfolio to fully capitalize on changing audience behavior."

Sinclair bought the 21 Fox RSNs and Fox College Sports for $9.6 billion in August 2019 from Walt Disney, and acquired a 20% interest in the YES sports network in the same month.

The RSNs have suffered as a result of a combination of subscriber losses driven in part by a loss of vMVPD distributors, including Hulu + Live TV and YouTube TV; and advertising losses exacerbated by the pandemic.

Total RSN distribution and advertising revenues for July-September 2020 were at $727 million, versus $352 million in the year-ago period.