Sinclair is raising more than $250M for an OTT/DTC streaming service (via New York Post) that is supposed to be built around its 19x formerly Fox Sports, now Bally Sports - branded regional sports networks. Put differently, Sinclair reportedly intends to untether its live (local) sports programming from the traditional pay-TV bundle — a 📉 distribution system in secular decline but that generated 💰 outsized returns for sports rights-holding content programmers for a long time. 

Neither making the entire linear programming co-exclusively available over-the-top (of traditional distributors) nor a full-fledged content migration from linear RSNs to an OTT streaming service are likely to happen anytime soon. ❌

Other articles have already extensively covered the 🧑🏼‍⚖️ legal practicality (via Sports Business Journal; think: distribution/carriage deal with TV-operators) and 🎞 alternative / more likely content proposition for any OTT/DTC streaming service by Sinclair (via John Wall Street; think: incremental programming such as highlights, editorial content, e-commerce opportunities, free-to-play games, and unsold/limited local live game inventory). 

This blog, instead, focuses on the 📊 economics of making any of pay-TV bundle’s anchor (sports) channels such as RSNs, ESPN1/2, or Fox Sports 1/2 available outside of its traditional distribution system: Either by rolling such programming up into their respective established national streamers (think: Peacock, ESPN+) or as stand-alone (local) propositions (think: Bally Sports). 

In this context, 💰 raising additional capital and 💳 an expensive monthly price point encapsulate two major implications of shifting live sports content distribution from the traditional 📺 Pay-TV Bundle (Wholesale) to 📱 OTT (Retail):

• 📉Bridge-financing Revenue Gap during Cable-to-Streaming Transition

• 🧾 Over-Monetizing Niches with unprecedented Price Points for OTT Streaming Services

Along the way, the blog also covers other topics, including but not limited to:

• Why/how 💸 new revenues streams are enabled by going OTT (and ideally even DTC) and are also needed to re-establish the economic profits to which sports rights holders have become used to in the past.

• Why/how the target market for content programmers shifts from 📡 content distributors (= wholesaling) to 👥 content consumers (= retailing) when going OTT/DTC and this not only requires enormous financial investments but also a shift from a B2B- to B2C-centric mindset.

• Why/how 🔀 ESPN maintains optionality by following a dual-pronged content approach and sustaining two mostly distinct sets of programming with limited overlap for two different distribution systems: one for linear and one for streaming.  

Ultimately, there is a scenario that could get even traditional TV distributors such as AT&T, Verizon, or Comcast — the obvious opponents/losers of such developments at first glance — on board: Even in an OTT/DTC universe, there will always be ✋🏼 universal gatekeepers (think: supply/demand economics, powerful network effects, zero-cost marginal revenues/distribution) that can offer the best, most complete user experience. Positioning themselves as super-aggregators and leveraging their vast direct customer relationships (think: Connectivity/Aggregation as USP) might be more sustainable than holding onto low-tier pay-TV subscribers that are the least-profitable customers anyway. 

I would appreciate any feedback or a follow on Twitter (@yannickramcke), where I share my thoughts regarding current developments in everything "Sports Business, Media & More" on a regular basis.