Adam Symson, CEO of EW Scripps
Source: EW Scripps
Owners of local television stations, including Sinclair, TEGNA And EW Scripps All saw their ratings plummet this week Disney, Warner Bros. Discovery And Fox announced a new sports joint venture set to launch this fall.
Sinclair fell 12% on Wednesday, TEGNA fell 7.2% and Scripps plunged 24% as investors weighed the importance of a new, thinner cable bundle of sports channels that includes ESPN, TNT and Fox, but CBS and NBC on the outside will let ahead. Sinclair rebounded Thursday with a 7% gain, while TEGNA and Scripps were little changed.
However, according to EW Scripps CEO Adam Symson, Wall Street’s reaction is overblown.
For one thing, investors appear to be expecting that ABC and Fox’s local affiliates wouldn’t be part of the new, thinner package, Symson said in an interview with CNBC. They would be included, he said, pointing to assurances given to him in discussions with Disney executives. Scripps owns 18 ABC stations in markets such as Phoenix, Detroit, Cleveland and Tampa, as well as 4 Fox stations.
“Partners will be compensated for the ride,” Symson said.
According to a person familiar with the matter, who did not want to be named because of the discussions, the joint venture will work with all local broadcast partners, similar to how other digital multichannel bundlers such as YouTube TV and Hulu with Live TV are private.
This means consumers of the new package will be able to get their local news and sports programming from ABC and Fox.
A spokesman for the joint venture declined to comment.
A partial buffet
Despite it, Paramount Globalis CBS and Comcast‘s NBC are not part of the new package, potentially putting those networks’ affiliates at risk.
But only if the bundle takes off. Which, according to Symson, is unlikely without these channels. Scripps has 9 CBS and 11 NBC stations.
“Wall Street acted as if this was a product of fundamental change,” Symson said. “I have nothing against the opportunity or the idea that there is value here. But take March Madness. You will only have access to TBS and TNT, but not CBS. It’s not the efficient package that Wall Street is making it out to be.”
While an executive associated with the joint venture privately told CNBC it would be “a monster,” Symson disputed that premise, saying he said sports fans wouldn’t be happy with a partial offer.
“People don’t want to go to a buffet with half the steam bowls missing,” Symson said.
FuboTV, another sports-focused network package, hasn’t yet reached 2 million subscribers — and it offers more sports than the new package is likely to offer.
A smaller package priced at $40 or $50 a month also probably won’t reach a large audience, Symson said.
“If you are a sports fan today and need access to all the live broadcasts of your favorite sports, it is best to keep the pay TV package as is,” he said. “It calls into question the value of the consumer offering.”
While Disney and Warner Bros. Discovery will be able to attract new subscribers by bundling the new service with existing streaming services Disney+, Hulu and Max, he noted that the service is viewed by investors as supportive of broadcast networks should be.
“If network partners like Scripps are compensated for carriage on this platform, as we do on other platforms, that is potentially additive,” Symson said. “It’s just another product among products that are essentially the same thing.”
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2024-02-08 22:26:09
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