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Sinclair president Ripley: “There’s a real commercial logic” behind buying more RSNs

Seemingly in a matter of months, Sinclair Broadcast Group has become one of the most important players in US sports broadcasting. The Baltimore, Maryland-based company, best known as one of the country’s largest owners and operators of local broadcast TV stations and a part-owner of startup digital sports media network Stadium, early this year formed a partnership with Major League Baseball’s Chicago Cubs to create the Marquee Sports Network. The new regional sports network, now the local TV home of one of the most popular teams in US sports, is set to debut early next year. 

Sinclair then built upon that much-discussed deal by prevailing in a high-stakes auction for the set of 21 Fox regional sports networks the Walt Disney Company was forced to sell following its acquisition of 21st Century Fox, giving the company sizable television presence across not only MLB, but the National Basketball Association and National Hockey League. Not content to rest there, Sinclair was also part of a group helping the New York Yankees reacquire a controlling stake in the YES Network, which in most years is the most-watched RSN anywhere in the US. 

Chris Ripley, Sinclair’s president and chief executive since early 2017, recently spoke with SportBusiness US Editor Eric Fisher on numerous topics including the future rebranding of the Fox stations, Sinclair’s future acquisition plans, and how the company’s noted and sometimes controversial conservative news bent might interact with its sports operations.

What is the status of the integration of the Fox Sports regional sports networks into Sinclair?

It’s going well. It’s a relatively simple process. It is work, though, you have to put in the work, unplugging Fox corporate and plugging in Sinclair corporate. But it’s something we’ve done time and time again on the station side.

What happens with the branding and renaming of these RSNs?

It’s a great question. Rebranding the stations presents a great opportunity. No one watches these stations because they’re called Fox Sports. They watch because their local teams are on those channels. So a SWAT team is already formed [to look at this]. This is a separate initiative – what should we call these channels? It’s really a very unique situation. I’ve never seen a major media asset come in with no brand whatsoever. So you’ve got a fresh sheet of paper, which means we’re thinking about things. And because there’s already a base of consumption, whatever brand you come in with is immediately going to accrete value. There’s broadly two ways we think about this. One, you could just invent a new brand. But that only makes sense if you’re also going to use that brand somewhere else, because there’s no way to monetize the brand unless you’re actually using it in other ways. The other way we’re thinking about it is whether we should have a sponsor involved in the brand in some way. You think about the exposure a sponsor could have being associated with the network on its name, and that’s got tremendous value. Quite honestly, I don’t think any other media company would do that with its brand in place already. But since we don’t have one, we’re starting to think about things that are unique. 

What kind of timetable does all this exist on?

There are a lot of dependencies that come with renaming the channels. You’ve got to do a whole [on-air] graphics refresh. And the graphics, quite frankly, are looking a little stale. So they need a refresh anyway. But you’d want to change the graphics. You’d also want to coordinate with a digital footprint reboot. So there’s a lot of things that would need to change. We have an 18-month runway of using [the] Fox Sports [name]. If it was just about changing the name, I would say let’s change it tomorrow. But if I had to guess, I would say it’s going to be at the latter end of that 18-month timetable, given all of the other things involved and work that needs to be done.

What is the likelihood of Sinclair buying more RSNs and further building the portfolio?

AT&T is rumored to be in the market [with their four RSNs]. So we would be interested in that. And you’ve got all of these singletons in the market, like MSG here [in New York], NESN, MASN, and so on. And you look at how in many cases they’re underperforming relative to the market. They’re often not getting carriage on the virtual MVPDs, which is the growth area of the market. Their cost structures are higher because they don’t have scale. And there’s no synergy. So it’s not a real good time to be a singleton. There’s real safety in numbers. Our platform has 55 per cent of all the US-based [pro] teams. And we’re always going to have teams that matter. We’re always going to have winners. You hear that winning really matters. Well, that’s why we have 55 per cent of the teams. We’re always going to have winners. 

So you’re saying there will be some additional acquisition activity of some form by Sinclair?

Yes, I think there will be. There’s real commercial logic for it. You need to come to a deal. People have to agree, and that can prevent some things from happening. But when there’s commercial logic behind it, that tends to lead to activity.

How is YES going to work for Sinclair, with you being a minority partner there as opposed to a majority owner of your other RSNs?

We’re not going to treat YES any different than the rest of the RSNs. With a lot of our other RSNs, we have other owners, like the teams themselves. So we’re going to treat YES just like everyone else. They’re a part of the family, and they’ll see the benefits of our best practices that we’ll spread across the rest of the RSNs. The ownership structure does make a difference in that [YES president] Jon Litner reports to the [YES] board instead of reporting up through our governance structure. But from a day-to-day perspective, it doesn’t really make that much difference. And we’re excited to have partners like Amazon in the YES Network, where they’re going to be games over the top and they’re going to be innovating the viewer experience. Based on what they do with YES, that could be a model for our other RSNs. 

You’ve obviously got the Cubs’ Marquee Sports Network debuting next year. How do you avoid the mistakes at launch that the Dodgers’ Spectrum SportsNet LA made and the continued distribution challenges they’ve had?

There’s a couple of different ways. Number one, it’s the reason the Cubs chose us to partner with us, to avoid that outcome. We now come with a huge portfolio of teams and a whole broadcast portfolio to make that [carriage] discussion easier with distributors. 

But you had this Cubs deal in place before you had the Fox RSNs and those additional teams.

Yes, but we’ve had great relationships with distributors on the broadcast side. So there’s that. Also, when you look at the fanbase in Chicago, it’s stronger and more concentrated than what you see in LA. And the other thing that we won’t do is that the Dodgers came out with really huge step-ups in pricing. And the distributors there just said no. The Dodgers needed that because it was securitized to finance the purchase of the team. We don’t have that situation here. We’re coming into the market with a very reasonable pricing scheme, and coming with the most-watched [sports] team in that market. 

You mentioned during the pursuit of the Fox RSNs that there will not be crossover between your news operations, particularly at your local broadcast stations, and your sports operations, and that there would be a firewall between them. Is that still the plan?

Yes, and the sports operations have their own capital structure. It is a separate division that will pursue its own growth strategy.

And that relates to programming as well?

To the extent that we can share resources, and it makes sense for both entities, then we’ll do that. We’re certainly going to try to create efficiencies and synergies. But [the sports division] is going to be a sports-focused entity.  

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