Sinclair Broadcast Group’s regional sports networks (RSNs) -- which continue to be a concern for investors -- witnessed slightly lower advertising revenues, 5% to $118 million, in the third quarter.
RSNs distribution revenues grew 6% to $633 million, which includes $14 million in rebates to distributors, due to minimum game guarantees resulting from COVID-19 pandemic-related issues. At the same time, Sinclair had $9 million in lower payments to teams, due to overpayments.
Responding to Major League Baseball commissioner Rob Manfred's heavy criticism of Sinclair RSNs, President-CEO Chris Ripley said Sinclair has firm deals for airing local market games during the company’s third-quarter earnings call.
“We have linear and authenticated streaming rights for all teams, and we have direct-to-consumer [D2C] rights now for four teams, which are all the teams that we’ve renewed post acquisition.”
Ripley added: “And then for NHL and NBA, we have always had linear authenticated streaming and [emphasis added] D2C rights."
Authenticated streaming rights are attached to deals with cable, satellite, telco and virtual pay TV providers, where consumers need to have a pay TV subscription to view.
Newer D2C streaming platform deals are up for grabs, according to analysts -- a key piece of future revenue growth.
In response to the possibility of MLB partnering with Sinclair -- among other issues -- Manfred has said Sinclair’s $8 billion in debt, due to its $10.6 billion purchase of the former Fox regional sports networks, would not be attractive to the league.
Sinclair has been plagued by new virtual pay TV providers dropping or not making deals with its RSNs. The list includes Dish Network’s Sling TV, Hulu + Live TV and YouTube TV.
Company-wide, Sinclair Q3 quarterly revenue slipped 0.3% to $1.54 billion versus the prior-year period.
Net income attributable to Sinclair was $19 million versus net loss of $3.3 billion in the prior-year period.
Total Sinclair advertising -- including TV stations, RSNs and digital platforms -- declined 11% to $446 million, due to lower political revenues. Core advertising revenues -- sans political revenues -- were up 11% to $434 million.
Distribution revenues were up 5% to $1.05 billion versus $1.0 billion.