Cord cutters in the area, rejoice. Bally Sports, owner of Bally Sports Great Lakes and Bally Sports Ohio, announced plans to release the unicorn-ish standalone app for streaming their assorted live sports in 2022.
Or don’t. And to be honest, none should rejoice just yet.
Those who subscribe to live TV streaming services such as YouTube TV (in the interest of full disclosure, I use this one) or Hulu with Live TV have lived in a live sports desert since last fall — no Cleveland baseball, no Cavs basketball — because those companies deemed the cost associated with the Bally Sports channels would further trim profit margins.
They are content to focus on entertainment and the national-level sports networks — ESPN, FSN, NFL Network — betting that’s enough to placate the casual sports fan who prefers the value they offer instead of an expensive all-encompassing package. I suspect they are right.
Bally Sports fires a shot
But Bally Sports, owned by the Sinclair Broadcast Group, is prepared to go it alone, apparently, floating a $23 subscription price for a standalone app to lure those cut off from their favorite sports teams. They’re looking at you, Northeast Ohio, for 2022 with Bally Sports Great Lakes and Bally Sports Ohio.
John Ourand of the Sports Business Journal isn’t betting on the likelihood of this happening anytime soon for myriad reasons, despite Sinclair Broadcast’s effort to raise $250 million to get the app launched in time for next year’s baseball season.
Ourand said in an interview on the Spotlight SBJ podcast that there’s a complex web of digital rights and relationships with the leagues — MLB, NBA and NHL — to navigate, not to mention that the act of separating streaming rights from broadcast rights would surely poke the bear that is known as the cable TV industry, which still represents the primary revenue source for Bally Sports regional sports networks.
More:Baseball fans strike out as YouTube TV, Hulu impasse continues with Bally Sports channels
And that’s where it seems that Sinclair CEO Chris Ripley is trying to thread a very, very fine needle with respect to trying to accomplish what some view to be a minor miracle.
A direct-to-consumer app could present two futures for the company and consumers.
The first: The app is wildly successful beyond the dreams of anyone at Sinclair, and it eventually leads to the unbundling of content from the nation’s cable providers and a more a la carte model — something consumers have screamed they've wanted for an eternity.
The second: That unbundling leads to those same cable companies dropping Sinclair’s regional sports networks with haste, thus killing a significant revenue stream. What happens then? That $23 monthly price will likely boom to something a bit more unwieldy.
Let’s deal with the reality of the popularity of sports on television in the real world, not social media. As I’ve reported in the past, research from Wizer, a marketing study firm, showed that 21.6% of pay TV subscribers watch ESPN regularly. That leaves a significant portion of them who do not. Sports fans remain an avid, vocal minority, but even folks who fall into those categories have budgets.
Numbers do not add up
While Sinclair may be looking to raise $250 million to get an app made, ultimately the economics do not work. I liken it to the conundrum the pandemic presented movie studios, most of which have ties to streaming services. Those wishing to worship the almighty tech gods predicted the demise of movie theaters the minute Warner Bros. elected to go with a day-and-date release of its 2021 (formerly 2020) slate of films in theaters and on its HBO Max service, hoping to drive subscribers to it.
Their leadership announced earlier this year that that will not be happening for next year’s films and, I suspect, it may not even happen for blockbusters such as “Dune” later this year. The reason: Theatrical revenue is a key component in its business model. At the prices charged for streaming services, paying for some of the blockbuster films that people love to flock to on hot summer days and during the holiday season would be cost-prohibitive.
More:YouTube TV cutting Fox regional sports networks part of new normal
The point: Bally Sports would lack a substantive revenue stream outside of subscriber fees. Is there a way to make that up? Possibly, when considering the name “Bally” and its place in the gaming industry. Sinclair and Bally have been upfront with their desire to explore in-game betting opportunities to generate revenue.
Currently 21 states offer sports gambling. It could grow soon this year as a bill to legalize it in the state of Ohio slinks its way through the legislature. It’s not difficult to surmise that the powers that be from Sinclair and Bally are paying attention to what’s happening in Columbus and other parts of the country.
Reach George M. Thomas at [email protected] or follow him on Twitter@ByGeorgeThomas.
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