Better days may not be ahead for Sinclair Broadcast Group and its sports networks.
The telecom firm’s bleak forecast shows that cord-cutting and the pandemic have cratered business.
Sinclair acquired 21 regional sports networks and Fox College Sports from Disney for $9.6 billion in 2019. The deal included exclusive local rights to 42 professional teams across the four major U.S. sports leagues.
But due to events canceled and delayed by the pandemic, Sinclair lost a slew of distributors including Dish, YouTube TV, and Hulu. The company’s stock price fell to $30.93 Friday, wiping out its 2021 gains, before a slight rebound to $32.65 at market close Monday.
Over the past few months, Sinclair has joined forces with Bally’s Corp. to combat the losses.
In November, the company signed a naming rights deal with the casino operator in which Bally’s agreed to pay Sinclair $85 million over 10 years for exclusive naming rights to the company’s 21 sports networks. Sinclair received a 15% stake in Bally’s, with the right to increase the holding to 30% if broadcast goals are met.
In February, Bally’s announced its acquisition of free-to-play sports game provider SportCaller. It also acquired sports betting platform Bet.Works and fantasy sports operator Monkey Knife Fight.
Sinclair will lean on the sports betting ventures and a potential debt exchange to dig itself out of the hole created by its sports networks.