The gold rush is in full swing as gambling, sports, and broadcasting companies scramble for a share of potential winnings that may be realized as the lifting of the sports betting ban takes effect in different US states. This after the May 2018 ruling by the U.S. Supreme Court to strike down the PASPA sports betting ban. Some states were quicker at getting the necessary laws and regulations needed to govern sports betting in place. Idaho and Wisconsin have not yet tabled legislation, and it’s unlikely that Utah will.
The same can be said for some gaming houses and sports networks — some were quicker off the mark than others. Sector leaders DraftKings and MGM Resorts were off the mark as early as August 2018 and January 2019 respectively. Others have been less agile. FuboTV is due to launch a sports wagering and game streaming app this summer after its acquisition of Balto Sports in December 2020.
Count Us in Too
After a reverse merger, Bally’s Corporation (formally Twin River) went on a rapid expansion-through-acquisitions spree. The name change to Bally’s Corporation in November 2020 came after Twin River acquired Bally’s trademark from Caesars for $20 million in October 2020. The following month Bally’s acquired the sports betting provider Bet.Works and reached a naming rights agreement with Sinclair Broadcast Group to rebrand its Fox Sports Network to Bally Sports. Bally’s acquisitions continue in a bid to strengthen its online gaming and betting business, including SportCaller, a provider of free-to-play online games, and Monkey Knife Fight, the third-largest daily fantasy sports operator in the U.S.
The agreement between Bally’s Corporation and Sinclair Broadcasting Group is more than a name change for the regional sports network. It’s a quid pro quo agreement that gives Sinclair a 15% stake in Bally’s and gives Bally’s the freedom to advertise extensively on the 21 regional sports networks — and run its online gaming business via the channels.
The Bally-Sinclair collaboration is interesting as it morphs the corporate identity of each into something new — the combination of sports, gamification, fan-targeted content and online gambling into a single package.
The move is timely, but the risks are not yet fully mitigated. With the recent loss of distribution agreements with YouTube TV, Hulu, and FuboTV, and with AT&T being the only streaming company offering the service, the need for direct viewer access via the app is critical.
Game Plan
According to Statista, live sporting events often attract some of the highest TV audiences in the United States, with millions of viewers tuning in to watch the live-action play out. In 2019, approximately 154.4 million viewers in the United States watched live sports content at least once per month, a figure that is projected to rise to over 160 million by 2024. Gambling numbers aren’t as clear, because most sports gambling is only now becoming legal in the U.S. The American Gaming Association reports that the first quarter of 2021, commercial gaming revenue nationwide reached $11.13 billion, an increase of 17.7 percent from the same three-month period in 2020. More impressive: gaming revenue was up 4.0 percent from 2019.
The market clearly has significant potential, and the Bally-Sinclair collaboration aims to tap into it.
For local sports teams, lucrative broadcast rights are an essential element to remaining sustainable and growing. Part of that mix is the size of the fan base, their enthusiasm, and support.
For that fan base to be happy, they need to be able to view the games without financial penalty. Easy access to games without contractual commitments to streaming channels is the best outcome for the fans.
Managing the tension between the cost of contracts with teams, viewer engagement, cost-effective streaming and content creation are the broadcasters. The creation of a direct-to-viewer platform monetized through gamification seems to be an intelligent solution. Time will tell.
About Sinclair Broadcast Group
Sinclair Broadcast Group, Inc. is a diversified media company and leading provider of local sports and news. The Company owns and/or operates 21 RSN brands; owns, operates, and/or provides services to 186 television stations in 87 markets; is a leading local news provider in the country; owns multiple national networks; and has TV stations affiliated with all the major broadcast networks. Sinclair’s content is delivered via multiple platforms, including over-the-air, multi-channel video program distributors, and digital platforms. Sinclair, either directly or through its venture subsidiaries, makes equity investments in strategic companies. Sinclair Broadcast Group, Inc. was founded in 1986, went public in 1995, and is traded on the NASDAQ Global Select Market under the ticker symbol SBGI.
