Starting 9: Sinclair Broadcast Group enters MLB

The big news around baseball this week was news about Sinclair Broadcast Group finalizing the purchase from Disney of the rights to a number of regional sports networks. What does this mean for the average baseball fan? With a lot of the coverage getting significantly slanted into political discourse, I thought Sinclair as the topic of my Starting 9 would be an excellent match this week.

Taking the mound: Sinclair’s origins

Sinclair Broadcasting Group has company history dating back over 60 years. Julian Sinclair Smith, who is the source of the “Sinclair” portion of the name, was an electrical engineer who got together a group of shareholders to form a broadcasting trade school in Baltimore in 1958. The institute began a radio station in 1960.

Smith was part of launching the first television station for what was now Chesapeake Television Corporation in 1971, with 2 of its 3 stations in 1986 becoming charter affiliates of the Fox Broadcasting Company when it launched. At that point, the organization had been known as the Sinclair Broadcast Group for roughly a year, with Smith’s son David taking the lead role in the company and beginning a very aggressive acquisition strategy beginning in 1990.

This aggressive strategy continued until the housing crisis of 2008-2009 seemingly brought Sinclair to its financial knees, threatening bankruptcy in a 2009 document to the Securities and Exchange Commission. However, after roughly 2 years of inactivity in acquisitions, Sinclair was as active as ever again beginning in 2011.

Behind the plate: Monopoly avoided, but another on the way?

The regional sports networks were available due to Disney’s recent acquisition of Fox. As Disney owns ABC and ESPN already, they were running into potential legal monopoly issues and were forced to sell Fox’s regional sports networks as part of the acquisition.

The issue is that Sinclair is very near their own limit and has had to sell off stations multiple times recently, meaning that Sinclair could potentially have to sell again soon, which leaves the local coverage for games, the way the majority of baseball fans still consume their team’s games, in flux.

First sacker: A common dispute

Sinclair is known for their aggressive moves within a newsroom in order to allow their stations to reach their maximum profitability. They’ve also pushed the limits of what they could get out of cable carriers to host their networks, often leading to disputes over pricing.

In roughly a 5-year period, Sinclair faced major pricing disputes with five of the major distributors of cable channels in the country, Mediacom, Time Warner, Comcast, Dish Network, and DirecTV. As cable cutting continues to eat into more revenue for cable providers, Sinclair’s insistence on pushing for every last nickel in their cable carrier packages could lead to many fan bases potentially locked out of their games on their regional provider.

This past year saw the potential issues that could arise when the biggest TV deal in the game has a dispute with local carriers and cannot get on the air when the Dodgers began the 2018 season with no coverage in the Los Angeles area on multiple cable providers. This could be devastating to the game’s fanbase and especially to bringing in and keeping new fans if someone cannot find their local team on television.

One of the “new” ways that Sinclair could potentially add another layer into negotiating difficulties is by bundling. They have done this frequently with the Tennis Channel in order to get it on a lower-priced common cable package and in more homes so they could charge more for advertising on the channel. However, bundling the local CBS station that they own along with the regional sports network could definitely be something introduced into negotiations with cable companies, leading to potential blackouts.

Covering the keystone: Which teams are affected?

Craig Edwards at Fangraphs did a great piece that highlighted each of the teams affected (along with other networks that are owned after this purchase by Sinclair).

Currently, those teams whose Regional Sports Network is directly owned by Sinclair broadcast the Angels, Braves, Brewers, Cardinals, Diamondbacks, Indians, Marlins, Padres, Rangers, Rays, Reds, Royals, Tigers, and Twins.

The Cubs and Yankees each reached deals to own a majority share of the television rights by purchasing them from Sinclair as part of this deal, but Sinclair does still maintain partial ownership of the television rights for both teams.

Hot corner: Strange bedfellows

One of the major questions that people have asked is how it is that Major League Baseball and Sinclair could sync up. With MLB seemingly focused on the future fan with major changes to gameplay in the last few years along with multiple initiatives in pricing, not to mention one of the innovators of streaming technology that has allowed young fans to get into the game. On the other hand, Sinclair is known for seeking the best immediate returns for their company.

One area that Sinclair and MLB both have been known for recently is lobbying in Washington, D.C. and in various states in order to get laws changed to allow for questionable business practices to continue. With Sinclair, it’s increased national market share through utilizing local marketing agreements, a sort of “franchising” for a news station.

MLB has recently been spending time in D.C. and state legislators in order to continue what many consider “cheap” business practices with low pay to minor league players.

Another area MLB has been involved in that could have some intriguing mix with Sinclair is gambling. MLB has been one of the first major pro sports to align itself with gambling, which is why you see teams have to declare their starting lineups so much earlier than they once did.

Sinclair has discussed the idea of a gambling broadcast that would play alongside the game broadcast, allowing viewers to make bets on single plays (will the batter take the 2-2 pitch, what pitch will the pitcher go with here?), giving instant betting access. The issue with that, as anyone watching a game could tell you, is that live games are ahead of the broadcast by as much as 30 seconds. Simply keeping Twitter open could allow someone to really game the Sinclair idea on its surface, but it would be a way to quickly maximize profits of a new revenue stream now that MLB and gambling are not such distant enemies anymore.

Ranging at short: No freedom of expression?

One thing that I’ve always appreciated is watching games from different markets and hearing their announcer broadcast a highlight from an uninvolved game and compare it to another broadcast that also was not involved in that game. Hearing the takes of two different “baseball guys” on the same play is always an interesting thing.

Many have seen the video above showing forced broadcast on local networks from Sinclair, and it’s definitely something to worry on. Rather than having production groups from throughout the country to send open-ended highlights, could Sinclair dictate in a top-down manner that they are well-known for by sending out a highlight with a pre-ordained script that the announcers are forced to read? Could they send out a highlight with a prerecorded analysis of the highlight?

This may sound far-fetched, but top-down management is something Sinclair has been known for, even making it difficult for lower-level employees to leave their employment with carefully-crafted contracts that allow Sinclair the ability to employ at-will, but put financial punishments on employees for leaving too soon into their time in Sinclair employ or put tremendous post-employment disclosure restrictions on employees.

Needless to say, questionable employment policies would definitely something that Sinclair and MLB could also share (to go back to the last point), but at least MLB players are given some level of freedom of expression.

Deep left: Is there anything that can be done?

One other very important point that Craig Edwards pointed out in his Fangraphs piece is that even with this deal, teams retain their local streaming rights. It would require creating a second broadcast, which is not cheap or even in most teams’ field of expertise, but if they had that broadcast (something some have been suggesting could add to in-stadium experience anyway), the team could use that broadcast to sell to local cable if Sinclair was being unreasonable with pricing.

This is why the Yankees and Cubs purchasing a majority share of their own broadcast rights puts them into a very positive position for their future. Other teams could potentially do the same, or Major League Baseball may make the move to make the purchase on a league scale as well.

That streaming broadcast and the MLB Advanced Media crew that is still far ahead of the rest of the field in innovation could allow MLB to do similar to what CBS did when Sinclair attempted to drive the price up on Hulu’s TV service by excluding local stations. CBS instead chose to undercut Sinclair by including the national CBS feed for a more reasonable price to Hulu as they did not want the station excluded from Hulu’s service. MLB could use the streaming broadcast development to work with providers such as Dish, Hulu, YouTubeTV, and others to keep the local team on the air even if Sinclair is attempting to be harsh with price negotiations.

The final piece is that roughly half of the teams that are covered by stations that Sinclair acquired have a deal coming up within 5 years. Teams could very quickly negotiate Sinclair out of a lot of this deal by going with another provider or developing their own by the time that deal comes due.

Against the center field wall: Potential positives

While regional sports networks have never really truly tied to local stations with Fox ownership, that is something that Sinclair would bring. That could do some very interesting things with blackouts that could force MLB’s hand. They could provide the game as programming on local channels outside of the typical broadcast market, which most of their markets overlap, so they could potentially do that.

The other end of things is that Sinclair’s potential ability to influence blackouts could drive MLB to renegotiate their local market blackouts on MLB.tv, making that service viable for someone in North Dakota to watch a Twins game, for instance. National games would still be something to work around, but the potential ability to reach more fans with the flagship offering of the MLBAM group would certainly be positive.

Where the dandelions grow: The political stuff

Finally, we get to right field, and appropriately “right” field is the spot to discuss the elephant in the room – Sinclair’s highly conservative slants in its programming.

There have been many articles written about Sinclair’s inappropriate push of their own political ideology, and that’s not going to be what is done here, but there is one thing to be considered here – when there isn’t a game on.

Regional sports networks are known for having great lifestyle, history, and interview sort of pieces that they utilize during the season as programming on off-days or as programming before or after the game on game day. Sinclair’s heavy cost-cutting that they are known for around the industry will probably mean the production costs of those pieces will no longer be allowed.

The question is what will end up being the programming on the station outside of games? Will Sinclair push more political agenda onto regional sports networks? Could that potentially drive more fans away?

This is all still early, but given Sinclair’s reputation and what is really needed in baseball right now, this could be a bad fit for the game.

Become a Patron!