Three Things About the Disney/FOX sale of RSN’s to Sinclair

Image Courtesy of the Associated Press

Disney was forced to sell its 21st Century FOX-acquired Midwest-based regional sports networks (RSN) to a third party.  The third party winner of the bidding process was a joint bid by Sinclair Broadcasting Group (Sinclair) and Amazon.  Disney sold the RSN’s as part of an agreement with the SEC and U.S. Justice Department to avoid monopolistic practices and getting sued for such activity.  

Rapper and entertainment mogul Ice Cube along with his bidding group lost in the process, but his group’s entrance was a fascinating development and an encouraging note for what the future may hold. 

Besides Sinclair expanding its sports programming beyond The Tennis Channel and being one of very few new players in the sports streaming content space along with DAZN, a major accomplishment in its own right, there are three things about the Disney sale to Sinclair that may have gone unnoticed.    

1. Amazon will be Streaming more Live Sports

Upon first glance and without noting the specifics, one might miss that Amazon, yes the growing streaming ecommerce giant, will now be the distribution partner with Sinclair for the RSN’s sports content.  This is important because it means a traditional broadcast partner may be involved through Sinclair, but the streaming aspect would one of the first of its kind for major professional sports franchises.  To the previous point, YouTube, social media outlets like Twitter, Facebook, and streamers like Hulu, DAZN, and Amazon have licensed very specific sports packages of ten to fifteen games, but not entire teams and seasons like an RSN going to a streamer.  It is a sign of things to come where instead of being the only permanent streaming outlet for sports content, there is now competition with Amazon and ESPN+.  It also plays well with the idea that Major League Baseball (MLB) will be giving streaming rights back to the teams and no surprise why the MLB wanted to purchase the RSN’s. 

2. The Yankees are a Pioneer in Television Sports Broadcasting

As a peripheral move of the Disney-Sinclair sale, MLB’s New York Yankees purchased back the remaining ownership stake in their YES network.  The Yankees now become one of the first professional sports franchises to own and control outright their sports content.  Most franchises utilize a third party to distribute content.  This makes sense because the YES network is one of the most successful in terms of viewership.  Interestingly, in terms of showing the value of the pinstripe product, the Yankees purchased back the final remaining stake in YES for nearly $4 billion, while the entire 21 RSN’s sale from Disney to Sinclair was for $10 billion.    

3. Hulu may Add More Sports Content

With the Disney sale to Sinclair with Amazon as a distribution partner, it may provide the path for Disney-owned Hulu to become a more consistent streaming partner for sports content.  With Hulu adding more subscribers through partner relationships, it will need to add content to the platform and not every consumer will want to go through Disney-owned ESPN+. 

Overall, Disney has offloaded 21 RSN’s, while Sinclair and Amazon may continue their rise in the live sports content streaming space. 

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