Charter Communications and Sinclair Broadcast Group have agreed to a one-month extension on an expired deal to carry the broadcaster's regional sports networks and local broadcast channels on Charter's Spectrum TV system.
The extension will keep Sinclair's 294 broadcast stations in 89 markets -- at least those of which that are in the Charter footprint -- on the program guides of Charter's more than 15.8 million remaining pay TV subscribers. More notably, it might -- or might not -- keep Sinclair's Bally Sports-branded regional sports networks on Spectrum TV, as well.
With Sinclair's Diamond Sports Group (DSG) subsidiary aggressively moving forward with a plan to offer its 22 Bally Sports channels in a direct-to-consumer streaming package sans pay TV subscription, equity analysts and media pundits are watching the ongoing negotiations between Charter and Sinclair with gimlet-eyed focus.
Will Charter renew its broadcast retransmission agreements for Sinclair's local affiliates but demure on the Ball Sports RSNs, as Dish did in November when it ended a lengthy impasse with Sinclair? Will Charter keep the RSNs, but with the ability to put them in lower programming tiers?
For his part, lauded Sports Business Journal media reported John Ourand has called the Charter-Sinclair affair "the biggest sports media deal in 2022."
"Negotiations will go public and get nasty. In the end, Sinclair and Charter will work out a deal that keeps the Bally Sports RSNs on Spectrum. The rate Charter pays will essentially be flat from its current deal," Ourand wrote in December.
indeed, this negotiation has been closely forecasted for months.
"Imagine being on the Charter management team and hearing that DSG is going over the top on an a-la-carte basis," wrote LightShed Partners' principal Rich Greenfield in January. "Charter has to pay for every single Charter subscriber in a DSG RSN market, despite only a small fraction watching or even caring about their local RSN. Meanwhile Sinclair’s DSG can offer a digital version of the RSN service directly to ONLY those that want it."
Sinclair, of course, is boldly walking the fine line all media network operators must traverse as the linear pay TV ecosystem continues to shrink, only in perhaps a much more exaggerated way, given the nearly $10 billion in debt Sinclair incurred building its RSN business.
Sinclair finds itself in a Hail Mary situation with investors, needing a bold, innovative plan like OTT distribution to convince them that it can keep Diamond Sports out of bankruptcy.
At the same time, losing carriage on the No. 2 U.S. pay TV operator would be catastrophic for DSG's bottom line.
Adding further complexity ... and more leverage for Charter -- Major League Baseball's lockout of its players has reached a crisis stage, with the league cancelling Tuesday the initial round of games for the 2022 MLB season.
