Sinclair Purchases Disney’s Sport NetworksJake Cooper | 13 May 2019
Sinclair Broadcast Group has bet its future on sports wagering in an exclusive new deal with Disney Entertainment Studios.
Under the new agreement, SBG will pay Disney $10.6 billion in cash in return for 21 regional sports betting networks across America. Following the announcement of the deal, Sinclair’s share price immediately soared by an impressive 30%; an increase of over $13 per share following early morning trading.
The US’s federal regulator ordered Disney, the largest entertainment studio in the world, to sell its local sports networks after it acquired a majority share in 21st Century Fox in a recent purchase. The deal in question was worth $71.6 billion, and saw Disney growing to all-new heights in the film and entertainment industries.
Exclusive Partnerships in the Works
Sinclair BG already holds an interest in New York’s YES sports network following the completion of a deal worth $3.5 billion. Some of the agreement’s co-partners included the likes of Jeff Bezos’ international e-commerce hub Amazon and the New York Yankees, demonstrating its magnitude.
SBG also recently teamed up with the Chicago Cubs to bring the Marquee Sports Network to the Chicago market. The network is set to start airing sometime during 2020, according to media reports. This was an ambitious move indeed for Sinclair; a company that now manages more than 200 different sports stations in the US alone.
SBG Well-Positioned in US Market
The popularity of real-time TV viewing has dropped in recent years as on-demand TV and streaming have significantly diluted its demand. However, sports broadcasting has remained as popular as ever in the world of live TV, with most people still consuming sporting content through television platforms. SBG is aware of this shifting sports landscape in the US, which has only been sped up by the end of the long-time federal ban on sports wagering.
While just 9 states have legalised sports betting to date, dozens more are set to make the move in just a few years’ time. With this in mind, companies that position themselves in the industry before this happens could stand to benefit hugely from the rapidly growing sector.
Sinclair is reportedly planning to license some of its sports content to platforms that are interested in gaining more access to the industry, like Amazon and AT&T. Meanwhile, the company’s executives see its Disney acquisition as a veritable bargain, considering that the deal was potentially worth $20 billion instead of the $10.6 billion that was paid. Now, SBG has set its sights on gambling advertising as a new income stream, which could bring in as much as $2 billion per annum from operators and bookies alone.