There will be no last minute shift in the thought process, and a multi-billion deal will not be torpedoed. On Friday, Sinclair announced that their purchase of the Fox RSNs (which was agreed to back in May) had been approved by the Justice Department. They’re now the Sinclair RSNs, current naming aside.
The total value of the RSNs was pegged at $10.6 billion, and the aggregate purchase price was $9.6 billion. Here’s how that $9.6 billion breaks down (via Sinclair’s release), and note that Sinclair is only paying $1.4 billion in cash.
The aggregate purchase price, transaction costs, and an additional cash amount contributed to Diamond was funded through a $1.4 billion cash contribution from Sinclair, $1.0 billion of preferred equity issued by a parent company of Diamond (also an indirect subsidiary of Sinclair), a $3.3 billion secured term B loan facility entered into by Diamond, and $3.1 billion of secured notes and $1.8 billion of senior notes issued by Diamond and Diamond Sports Finance Company.
If you’re wondering what the hell “Diamond” is, that’s the new holding company of the RSNs under the Sinclair umbrella. Byron Allen, the comedian who owns Entertainment Studios and bought The Weather Channel last year, is also attached to the purchase of the RSNs and the formation of Diamond.
The RSNs were acquired via a newly formed, indirect subsidiary of Sinclair, Diamond Sports Group, LLC (“Diamond”). Byron Allen has agreed to become an equity and content partner in a newly formed indirect subsidiary of Sinclair and an indirect parent of Diamond (“RSN Holding Company”). Mr. Allen, who bought The Weather Channel in 2018, is the Founder, Chairman, and Chief Executive Officer of Entertainment Studios, a global media, content and technology company.
Shortly after Sinclair’s agreement with Disney became public knowledge, CEO Chris Ripley talked about potential innovations on game broadcasts across the RSNs, including (of course) gambling. There was also some initial concern from distributors about Sinclair’s purchase of the RSNs due to how the company negotiates carriage agreements, but since then, both Charter and Cox have agreed to new deals for the RSNs.
What’s next? Sinclair has been rumored as a potential buyer for AT&T’s small package of RSNs, which would further their sports holdings, and the company is also launching a Chicago RSN, the Marquee Sports Network, with the Cubs in 2020. As for branding, that’s still up in the air, but it would make sense for Sinclair to have the RSNs rebranded in the next couple of months, with the MLB season coming to a close and the NBA and NHL seasons starting up. A midseason branding change happened a couple years ago with AT&T SportsNet (from Root Sports), but NBC Sports rebranded their RSNs nationally in October during the brief hiatus between the baseball and basketball/hockey seasons.
As for a name, Sinclair isn’t going to put their own name on it. The RSNs will probably be tagged as something like “Diamond Sports (region),” which definitely brings baseball to mind first and foremost. You’d think that if a national Marquee Sports rebrand would be happening, the holding company for the RSNs would at least have the word Marquee in it. A third option involves somehow working Stadium into the name, since Sinclair also owns Stadium and has worked pretty hard at building that brand up over the last year-plus. Stadium programming also could fill up a decent chunk of the RSN airwaves when live events aren’t on the air.
For now, all we can do is wait, read the tea leaves, and hope the rebrand and transition goes smoothly. If not, we’ll at least have plenty of local RSN drama to write about.