On Monday, Sinclair Broadcast Group’s Diamond Sports released its financial results for the third quarter. The subsidiary oversees Sinclair’s Bally Sports regional sports network (RSN) and their direct-to-consumer (DTC) streaming service Bally Sports+. Although the company again declined to share the early subscribers for the streamer that launched in its entirety for the NBA and NHL seasons on Sept. 26, company executives noted that they are pleased with the progress they’ve seen early on.
“We’ve seen encouraging demand for the service despite relatively low product awareness in the market,” Sinclair President and CEO Chris Ripley said on a call with analysts Monday morning. “The conversion rate after the free trial is strong at about 70%, consistent with what we saw after our soft launch in June.”
This report is in line with what Sinclair chief revenue officer Rob Weisbord noted last quarter. He said 74% of customers who went through the seven-day free trial of the streamer’s soft launch kept their subscription when it switched to a paid plan. At the time of the soft launch, only five of the Bally Sports RSN markets had access to the DTC product, and only baseball was in season.
With both the NBA and NHL in action when the service launched in all Bally Sports markets, there was likely increased attention and churn after the free trial, which drove numbers down a bit.
During the investor call on Monday, Ripley denied that Sinclair was looking to offload Bally Sports to Major League Baseball, the NBA and the NHL, as reported in September. Instead, he said the company had hired outside advisers who participated in all kinds of discussions with the leagues, including how to lower rights fees as the broadcast and streaming industries continue to decline.
“There is no sales process,” he said, “but they are talking to parties about downsizing, strategic partnerships and things like that.”
After the second quarter, Sinclair executives noted that time spent watching games via Bally Sports+ was “significant” during the limited MLB-only soft launch, and at least in some markets, Sinclair’s current offering to NBA and NHL clubs makes the even better. Ripley noted that the streaming version of Bally Sports North, which covers the rights to the NHL’s Minnesota Wild and the NBA’s Minnesota Timberwolves, has been particularly impressive.
“Minnesota Wild and Timberwolves games have had over 23 million minutes streamed through the first month of the season, with average unique streamers per game routinely exceeding a 1.0 rating in the Minneapolis CMA,” he said. “These early data points not only indicate robust engagement, they underscore our significant opportunity to generate revenue beyond DTC subscriptions as we continue to iterate the platform to include gamification elements, targeted advertising capabilities and e-commerce components.”
Ripley attributed the early strength of the service to a well-developed platform that Sinclair’s DTC team has put a lot of time, thought and effort into.
“The strong early adoption of Bally Sports+ speaks to the quality of the product they have built and that is reflected in the average app store rating of 4.5 since full launch,” said the CEO.
While the DTC side of Bally Sports looks promising, the linear channels are in dire straits. Diamond Sports has been negotiating with Major League Baseball for well over a year, and the two sides were no closer to an agreement in October. When Sports Business Journal asked MLB commissioner Rob Manfred if the league was dragging its feet on a rights deal, Manfred gave an answer that admittedly doesn’t sound very cooperative. “I don’t see it as dragging our feet.” said Manfred. “I think of it as digging my feet in.” Not ideal language from one of the sports figures most critical to Bally Sports+’s success.
In more positive news, Sinclair and the Los Angeles Clippers reached an agreement to broadcast the team’s games on Bally Sports SoCal. The pair called off the deal near the buzzer (no pun intended) despite a 27-year partnership.