Sports leagues weigh buyout of Sinclair regional sports networks – report (NASDAQ:SBGI)


Major U.S. sports leagues are considering a buyout of Diamond Sports – the nation’s biggest owner of regional sports TV networks that’s part of Sinclair Broadcast Group (NASDAQ:SBGI), the New York Post reports.

Sinclair stock (SBGI) was up 2.5% early Wednesday.

Major League Baseball, the National Basketball Association, and the National Hockey League may come together to take over the struggling Diamond Sports, according to the report.

Diamond operates 21 regional Bally Sports networks – the former Fox regional sports nets that were divested to Sinclair as part of approval for Disney to acquire the media assets of Fox.

Those RSNs account for more than half the U.S. broadcast markets, and add up to exclusive rights to broadcast games for 42 professional teams (14 in MLB, 16 NBA teams, and 12 NHL teams). But they’ve been bleeding cash, putting the networks at risk and amounting to an increasing threat for the teams they cover.

Sinclair agreed to buy the networks in a deal with an enterprise value of $10.6B in May 2019 – and Disney (DIS) had hoped to get $20B for most of the collection. Sinclair was worth about $4B as a company at the time.

Now Diamond is at a discount, and might bring $3B including debt. Failing to reach a deal could mean a contentious fight to force Diamond and the Bally RSNs into bankruptcy (which might threaten rights fees for the leagues).

Meanwhile, Sinclair has been moving full steam ahead on a sports streaming service it plans to fully launch on Monday.

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