Sinclair Says It Will Be Offering Standalone RSN Products as Soon as Next Year

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Sinclair Says It Will Be Offering Standalone RSN Products as Soon as Next Year

Chicago Cubs

As an important part of the baseball broadcast ecosystem, and the Cubs’ partner in the Marquee Sports Network, we follow the goings on at Sinclair Broadcast Group relatively closely around here. What happens with them and their Fox-branded regional sports networks (which covers more than half of MLB) is very important to the sport, and then what happens to them as an organization could impact the Cubs and Marquee. Basically: stuff they do can wind up fundamentally changing how fans access the sport. This is really important.

So, then, when it emerged just how brutal the third quarter was for Sinclair’s business, that was big news around here. Moreover, I started to speculate – based on some of the company’s comments at the time – that a direct-to-consumer approach was coming eventually (i.e., just buying a standalone product like Netflix).

Well, we’ve got an update on that, as Sinclair announced big changes ahead for their Fox RSNs:

The explicit linking of sports betting and the regional sports networks is notable enough – it’s an acknowledgment of the reality of how popular and market-moving sports betting is. A lotta people like to play, and there’s a whole lotta money in it. Probably  something to anticipate with Marquee going forward, now that sports betting is legal in Illinois.

But what is MOST notable from the series of the announcements was something Sinclair didn’t put nearly as front-and-center. It came up on the conference call discussing this announcement, as logged at the STL Post-Dispatch (where readers are particularly interested in what will happen with carriage of Fox Sports Midwest going forward):

But Sinclair president and CEO Chris Ripley said Thursday that what now is known as Fox Sports Midwest, as well as other regional sports networks Sinclair owns nationwide, will be available for customers to purchase independently.

“We have a pretty aggressive plan,” he said. “It will happen next year.”

But indications are that offering could be later than sooner, so consumers should not expect that option to be in place if the Blues are back on the ice in January — or possibly even by the beginning of the baseball season next spring.

In other words, Sinclair is saying they have a plan in place to offer STANDALONE products for these RSNs that users can purchase WITHOUT having a cable bundle. This is MAJOR news – if they can pull it off – and, like I said a couple weeks ago, would have MAJOR implications for cable and MLB:

So how will Sinclair actually do this with its RSN products? My guess is, at first, they’ll be able to sell a standalone app (monthly charge, just like Netflix), but the GAME broadcasts will be available ONLY in the officially-designated territory. That, obviously, will dramatically limit the value of the product, and will greatly reduce distribution. Nobody actually wants that in the long-term – MLB and broadcasters and app-owners are going to want to be able to sell their games to anyone who wants to pay the monthly fee.

It’s just that they can’t offer that yet without screwing the cable providers who paid huge carriage fees IN LARGE PART because they were the exclusive way for subscribers to get those games in that market. In other words, why would Comcast pay a huge monthly carriage fee (and pass that on to their subscribers) for Marquee if those subscribers could just get the Marquee app and all the Cubs games after cutting the cord?

Why does MLB care? Well, because this approach has allowed their teams to generate huuuuuuge TV rights contracts, in part because they are getting fees, indirectly, from every cable subscriber in the market, whether they give a rip about sports or not. If you start allowing direct-to-consumer, then those huge TV rights values erode or disappear entirely. And as I said in my Twitter thread, that approach might work for a major-market club like the Cubs (they could probably get enough direct-to-consumer subscriptions to match the total value they were getting from cable rights), but it probably wouldn’t work for a less-fan-behemoth club like the Pirates. And MLB has a justifiable interest in protecting all of its teams, not just the big boys (because if the little boys die off, then there isn’t a league in which the big boys can play).

Maybe there’s a way to sort this out via revenue-sharing – that’s probably what’ll have to happen long-term – but it’s really complicated when your league relies so heavily on local broadcast rights rather than national TV contracts.

So anyway, your short summary for the day: Sinclair says standalone products are coming as soon as next year for some of its RSNs, and given its outsized influence in MLB, I don’t think they could do that unless they knew the approach was going to be all right with MLB. That DOESN’T mean blackouts are ending any time soon, but it DOES mean another big step in that direction. Eventually, that could mean a totally standalone product for all teams and their networks. Stay tuned.

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Author: Brett Taylor

Brett Taylor is the Editor and Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.