Does Sinclair Plan on Taking Bally Sports RSNs Direct-to-Consumer via ATSC 3.0 Broadcast?
By Daniel Frankel
For some reason Sinclair won't explain, it won't license its Phoenix Bally Sports channel to NextGen-based pay TV startup Evoca TV
Evoca TV, a pay TV startup that delivers a bundle of more than 60 channels over ATSC 3.0 for $9.50 a month, recently entered the Phoenix market. It says that it‘s been trying, unsuccessfully, for more than a year to license what it sees as the lynchpin for that offering, Sinclair-owned Bally Sports Arizona, the regional sports network home of MLB's Arizona Diamondbacks, the NBA's Phoenix Suns and the NHL's Phoenix Coyotes.
”They refuse to do business with us, which is ironic coming from the company that led the development of 3.0,” said Todd Achilles, co-founder, president and CEO of Evoca TV, which also operates in Idaho and Colorado. According to Achilles, Sinclair Broadcast Group, which controls 19 Bally Sports RSNs through an entity called Diamond Sports, said it won't license Bally Sports Arizona to him because Evoca won't pay retrans fees for broadcast channels received by Evoca customers in Idaho.
This is seems like a strange reason to kick a customer out of the store, since Evoca doesn't bundle local broadcast channels in its service. Its users merely pick up the freely available ATSC 3.0 signals from these local broadcasters with their NextGen TV antenna. Sure, Evoca provides that antenna to them. But it's not something they couldn't buy themselves at retail.
”It‘s exactly like a smart TV,” Achilles said. “Would you make LG or Vizio pay retrans?”
According to SNL Kagan numbers cited by Achilles, 83% of Suns, Diamondbacks and Coyotes games are confined to Bally Sports Arizona RSN coverage. Evoca TV, which makes live sports a keystone element to its marketing, sees access to the RSN as pivotal to its expansion into Phoenix.
Is Evoca an NCTC-sized pee-wee leaguer, unable to pay the Bally Sports freight, and looking to embarrass Sinclair into granting it a discount carriage deal? Doesn't appear so. In Colorado, Evoca — launched last year by privately funded Edge Networks — licenses Altitude Sports, RSN home of the Denver Nuggets, Colorado Avalanche, Colorado Mammoth and Colorado Rapids.
Achilles said Evoca just “wants to pay the rate card” for Bally Sports Arizona.
So why is Sinclair telling Evoca to pound desert sand?
We went directly to Sinclair‘s top technologist, Mark Aitken, a pioneering force in the development and adoption of ATSC 3.0 several years ago. He kicked our email to Sinclair‘s PR department, which said it had no comment for us.
This is a bummer. But it‘s also good, because it leaves the matter open to wild — or maybe not so wild? — speculation regarding Sinclair‘s motives.
So here it is: Does Sinclair have ATSC 3.0 plans of its own for its RSNs? And does it view multicast DTC distribution via NextGen TV broadcast as fundamentally different, legally and contractually speaking, than IP-based streaming?
As has been reported on news platforms like ours recently, Sinclair announced over the summer plans to take its highly leveraged regional sports networks business out of the pay TV ecosystem and over the top.
That plan appeared to take on serious water last month, when Major League Baseball Commissioner Rob Manfred plainly stated that the league has its own DTC goals and that it has no plan to offer Sinclair the necessary digital rights to achieve its own DTC objectives anytime soon.
With only four of the 14 MLB teams Sinclair has licensed for Bally Sports RSNs currently granting Sinclair DTC/streaming rights in their RSN contracts, Lightshed Partners analyst Richard Greenfield declared it "#GameOver" for Sinclair's proposed gambit.
“Sinclair has tried to convince investors that it can avoid a Diamond Sports bankruptcy by transforming its 14 RSNs from being locked into the legacy MVPD/vMVPD bundles to a direct-to-consumer, over-the-top streaming service … and that there is a robust sports betting opportunity for the Diamond Sports RSNs to take advantage of,” Greenfield wrote.
But maybe there is a way through ATSC 3.0?
During last week's Sinclair Q3 earnings call, Sinclair CEO Chris Ripley had the air of a media executive who seemed to know something the rest of us don't, saying, “We do think we have a critical mass in terms of rights to launch a product, and that's what we intend to do.”
As Achilles noted, direct-to-consumer distribution of live sports via internet protocol is “incredibly expensive,” with operators having to manage hundreds of thousands —maybe millions — of simultaneous streams.
“Live sports is best over broadcast,” Achilles noted.