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Sinclair Media

Unconcerned by blackouts, Sinclair CEO sees growing sports arm fueling ad growth

By Andrew Blustein, Reporter

September 26, 2019 | 6 min read

Sinclair Broadcast Group is on a mission to present advertisers a new vision of the 21 regional sports networks (RSN) it officially acquired from Disney in late August.

Barclays Center

Barclays Center

Chris Ripley, chief executive officer of Sinclair, said during an event at Advertising Week New York that the local media giant is pushing a slate of growth initiatives to improve both the viewing and advertising experiences for its RSNs, notably around sports betting and improving the over-the-top (OTT) product.

Ripley is pitching advertisers these changes amid tense retransmission negotiations with cable operators.

Sinclair wrote an open letter to AT&T saying it has “harmed consumers using blackouts as a negotiating ploy,” and that it’s using its dominating market size to bully the broadcast industry. Meanwhile, Dish chief executive officer, Charlie Ergen, has said it doesn’t look like regional sports “will ever be on Dish again” thanks to the high cost of carriage fees.

When asked by The Drum if current and looming blackouts dampen Sinclair’s ambitions in local sports, Ripley said he’s “confident” deals will get done.

“I believe [Ergen’s] negotiating in the press, which he likes to do,” Ripley told The Drum.

Sinclair purchased the RSNs from Disney for $9.6bn as part of a Department of Justice-mandated selloff following the Disney-Fox merger. Sinclair also bought a 20% stake in New York-area station Yes Network for $3.47bn during that sell-off.

AT&T is rumored to be looking to offload some of its local sports stations, and Sinclair seems to be in line to snatch them up.

“We'll be looking at those [RSNs] and adding to the portfolio as opportunities come up,” said Ripley.

Growth around gambling and politics

Ripley thinks legalized sports gambling will “change the way people interact with sports forever,” and that integrating sports betting content or features into Sinclair’s RSNs will open up a new category of ad inventory.

“Online sports betting companies aren't going to be interested in advertising on national channels or national platforms,” said Ripley, as only 11 states have legalized sports betting. “They want to tailor their message on a state-by-state message, which makes the RSNs a perfect receptacle for that.”

Eventually, Ripley sees the sports viewing and sports betting experiences merging.

“We see a world where you'll be able to add data layers, you'll be able to add interactive betting layers, and at the end of the day open up new revenue streams for us and the teams, but also fundamentally make a more engaging and more entertaining experience for the viewer,” said Ripley.

Ripley noted 75% of Sinclair’s revenue comes from sports and news, but that its RSNs doesn’t attract political advertisers at nearly the same rate of the company’s news stations. Ripley wants to change that.

“When you take a look at the engagement of the audience, the quality of the demographics there, it makes sense to target sports,” said Ripley. “I don't really know why they haven't done more of it.”

Sinclair will also be adding ad inventory from RSNs into its network product, Sinclair Media Networks, allowing the broadcast group to scale out its ad availability. And Sinclair is looking at introducing fees specific to designated market areas (DMA).

“One of the things we'll be looking at is can we chop up an RSN into DMA-specific feeds and then have different ads based on the DMA. That would open up a lot of different opportunities for advertisers.”

For example, the regional sports network in Atlanta reaches audiences in smaller markets outside of that main area, meaning advertisers pushing Atlanta-specific messages are reaching consumers not in their target audience. Sinclair will look to give stations in smaller markets, such as Macon, Georgia, specific feeds that they could sell to local advertisers in that area.

Rebooting digital

Sinclair is also building out its digital footprint. In January it launched Stirr, an ad-supported local-oriented OTT app. Now it’s taking on the task of updating Fox Sports Go, the streaming app showcasing live sports it picked up as part of the multi-billion dollar RSN deal.

“Fox Sports Go is a fine app, but it really needs to be replaced,” said Ripley. “It needs to be upgraded. It needs to have more data, more interactivity, and it needs to be at the core of the offering as opposed to the afterthought that it is today.”

Ripley said Stirr and the soon-to-be-revamped Fox Sports Go app act as complementary services. Right now Sinclair has no plans to merge the two OTT products, but some non-game programming could make its way to Stirr.

“Would we ever add elements of the RSNs into Stirr? Perhaps, but that's not the priority right now,” said Ripley. “It'd be shoulder programming, but you could also add an authenticated feature to Stirr, so if you're in the environment and you were a subscriber, you could simply watch the RSNs.”

One top priority is a total rebrand, spanning digital and broadcast. Ripley said replacing the Fox name could even be an opportunity for advertisers.

“The whole rebrand is another initiative,” said Ripley. “Changing the name is an incredible opportunity to start fresh with a new brand that'll immediately accrue in value, or maybe it has some sort of sponsor engagement or involvement in the name.”

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