Part of Sinclair’s rationale for buying the former Fox regional sports networks in May 2019 was that they could combine those RSNs with their local broadcast network affiliates in future carriage negotiations. That kind of packaging approach has worked very well for the likes of Disney, leading to the likes of ACC Network and SEC Network gaining wide carriage as part of larger deals also including ESPN networks, ABC owned-and-operated local affiliates, Freeform, and more.
But Sinclair has had a harder time selling the (now Bally Sports-branded) RSNs lately. Those RSNs continue to not be carried on Dish/Sling (since 2019), fuboTV, YouTube TV, and Hulu+Live TV (all since 2020), as well as some cable providers. And Sinclair’s desire to bundle their RSNs with their local broadcast affiliates in future deals may be part of why they’re now saying that it’s “unlikely” they’ll reach a deal with Dish for further local broadcast affiliate carriage (plus Tennis Channel) ahead of an Aug. 16 deadline. Here’s more on that from Mike Farrell at NextTV:
With its retransmission consent agreement with Dish Network expected to expire next week, Sinclair Broadcast Group said Monday that it is “unlikely” that it will be able to reach a deal with the satellite TV giant.
Sinclair said that means 112 broadcast TV stations and the Tennis Channel will most likely go dark to about 8 million Dish Network subscribers across the country. In addition to the loss of a big chunk of its retrans revenue, the lack of a deal also could have repercussions for Sinclair’s regional sports networks, housed under the Diamond Sports Group umbrella, which analysts have said were counting on a Dish deal to be reached.
Whether the blackout would include Dish’s Sling TV vMVPD service is uncertain. Sinclair did not mention Sling TV in a press release issued Monday, but the streamer has been included in past retrans deals with other broadcasters.
Here’s more from that press release:
“We have tried unsuccessfully to reach fair and customary terms with DISH Network for the renegotiation of our retransmission consent,” stated David Gibber, Sinclair’s General Counsel. “Given the status of these negotiations, we feel it is important to alert DISH Network subscribers to the real risk that some of their favorite stations will no longer be available through DISH Network including their access to live, local news, popular syndicated programming, sports programming including college and NFL football, and the network programming of our ABC, CBS, FOX, NBC and CW affiliates in those markets. DISH subscribers are also at risk of losing Tennis Channel. With this loss, tennis fans will not be able to see wall-to-wall coverage of the Western & Southern Open from Cincinnati, OH in the run-up to the last Grand Slam of the year, the US Open.”
On-demand access and online access to the programming for DISH Network subscribers would also be lost at such time. “We apologize to our viewers for the inconvenience this may cause although our programming will continue to be available either through other program providers or via over-the-air antenna reception,” Gibber continued. “We encourage subscribers in these markets to contact DISH Network and let them know that it is important to them that DISH Network carry these stations and that they should switch to another TV provider if they care about their news, local and national sports, and top tier entertainment programming.”
Meanwhile, from Dish’s side, chairman Charlie Ergen (seen above in 2015) and CEO Eric Carlson said on a call with analysts they don’t get many customer calls about the RSNs, and that even the local affiliates are harder to justify these days with more programming moving to network streaming services. Here’s more on that from Dade Hayes at Deadline:
In an earnings conference call with Wall Street analysts, Dish chairman Charlie Ergen was asked about the source of the dispute with Sinclair. “At the end of the day, it’s about money,” he said. “It’s about economics. That hasn’t changed in any programming negotiation that I’ve been involved with.” Known for decades for his brinkmanship in carriage negotiations, Ergen has waged long-term wars with HBO and Univision in recent years and drawn a line in the sand with costly sports programming. Resistance to increased carriage fees has only increased since Dish began to pivot as a company away from pay-TV and toward the wireless industry.
Asked if there is any link between a potential deal with Sinclair for the broadcast stations and one for the RSNs, Ergen did not sound any hopeful notes. “We don’t have any customers calling us on RSNs today,” he shrugged. “If the local channels were to go down, we would have more than one customer calling us the next day saying, ‘Where’s my local channel?’”
As far as potential scenarios for sports, “We’re happy to talk about anything that’s creative and doesn’t harm our customers,” Ergen said. “But we’re not interested in taxing our customers when they don’t watch the channels. That doesn’t make any sense.”
Dish CEO Eric Carlson said viewership on broadcast is in decline. He noted downturns in ratings for the Tokyo Olympics as well as award shows and other live sports. Dish is “sympathetic” to local stations in general, Carlson added, because “a lot of them are in competition with their larger owners,” meaning increasingly streaming-obsessed network parents. NBCUniversal, he noted as an example, shifted Notre Dame’s football season opener to streaming service Peacock from its longtime home on NBC.
This is not a change of tune for Ergen, as he said in July 2019 that “It doesn’t look good that the regional sports will ever be on Dish again.” And with Dish not carrying those RSNs since 2019, the people who were going to leave over them have probably already taken their business elsewhere. Moreover, Sinclair has been talking up their plans to launch an over-the-top streaming option for their RSNs, with that now set for the first half of 2022 (as per Hayes). So that may provide even less incentive for providers to pick up the RSNs. (And some providers have already expressed their displeasure with that idea.)
As for this particular dispute, yes, there might be an impact for Dish from losing the local stations. That’s especially true around the start of the NFL and the college football season. And it’s notable that Ergen’s comment of “If the local channels were to go down, we would have more than one customer calling us the next day saying, ‘Where’s my local channel?'” shows Dish does still see value in those local affiliates. So it’s quite possible that a deal is worked out here for just the status quo antebellum of local affiliates and Tennis Channel, and that the RSNs remain off Dish.
But Dish has been willing to have disputes with local broadcast affiliates before, and has even offered antenna installation and savings on their Dish bill to customers willing to go that route to get over-the-air stations. They’re not afraid to play hardball. And neither is Sinclair, especially with them projecting a Dish deal (and an estimated $400 million in revenue from it) in their Diamond Sports Group filings (as per Farrell).
We’ll see if Dish and Sinclair are able to work out a deal here, and if that deal winds up including the RSNs or not. If there’s no deal, it looks like these local affiliates may be joining the RSNs in the ranks of channels no longer on Dish.