Moreno Family Exploring Sale of the Los Angeles Angels

[mmc]

Arte when Aaron Judge hits the market this offseason

[jsnpritchett]

This is interesting. The Bally Sports nets may be up for sale.  The article also mentions that bankruptcy isn't out of the question.  That could certainly complicate the Angels sale, given that Sinclair might not be obligated to make the ongoing yearly payments for the broadcast rights until their debt is restructured.

https://awfulannouncing.com/bally/sinclair-reportedly-hires-investment-banks-in-potential-lead-up-to-sale-of-bally-sports-rsns.html

 

[angelsnationtalk]

I hope Bally Sports disappears off the face of the earth. By far the worst viewing experience. Apps always crash, feed always freezes and every time i click to watch i get spammed by commercials. I miss FSW, and I hope the new owner considers his own network

[Dtwncbad]

Interesting development.  So a buyer could buy the Angels and Bally’s.

Seems like a fantastic opportunity for the right buyer.

[jsnpritchett]

24 minutes ago, Dtwncbad said:

Interesting development.  So a buyer could buy the Angels and Bally’s.

Seems like a fantastic opportunity for the right buyer.

Not so sure it's a "fantastic" opportunity.  The whole basis of why RSNs worked in the past (i.e., the ability to charge hefty carriage fees to cable/satellite distributors) is collapsing and no one has completely sorted out the streaming side of it--especially when it comes to MLB. 

[Dtwncbad]

2 minutes ago, jsnpritchett said:

Not so sure it's a "fantastic" opportunity.  The whole basis of why RSNs worked in the past (i.e., the ability to charge hefty carriage fees to cable/satellite distributors) is collapsing and no one has completely sorted out the streaming side of it--especially when it comes to MLB. 

I get that.  But if Ballys is distressed then this would be a moment where a new buyer would pay the “correct” price for the changing business model.

My point revolves around the idea of owning both the team and the network that carries the team.

[jsnpritchett]

28 minutes ago, Dtwncbad said:

I get that.  But if Ballys is distressed then this would be a moment where a new buyer would pay the “correct” price for the changing business model.

My point revolves around the idea of owning both the team and the network that carries the team.

And my point is that that combo might not be as attractive as it once was, even at whatever theoretical reduced price an individual RSN might go for these days (also, it seems like Sinclair would try to offload their entire RSN portfolio to one buyer/investor if they go down the sale route, rather than trying to find 21 individual buyers (or some combo of buyers)). 

Right now, the Angels get $150M/year from Sinclair/BSW for the broadcast rights and they don't have to do anything to get that money.  Even if the Angels new owner were able to buy just the BSW asset rather than the whole Sinclair RSN portfolio, they'd still be "losing" the $150M in what is essentially found money, plus taking on the expenses (and revenues, obviously) of running an RSN.  Without streaming rights for the Angels (which still seem to be tied up in some sort of weird limbo), even at a drastically reduced purchase price, it's probably not worth the hassle for a new owner.

EDIT: Also, this is a lengthy article from a few months ago, but still well worth reading if you're interested in the future of RSNs:

https://www.cnbc.com/2021/11/21/sports-fans-are-being-sidelined-as-rsns-fight-the-decay-of-pay-tv.html

Edited August 31, 2022 by jsnpritchett

[Dtwncbad]

How would they “lose” $150m again?

Because they owned both entities?

So where does the $150m disappear to? 

[jsnpritchett]

1 minute ago, Dtwncbad said:

How would they “lose” $150m again?

Because they owned both entities?

So where does the $150m disappear to? 

That's why I put it in quotes.  In theory (assuming no bankruptcy declaration before purchase and no re-negotiation of deals/debts), if the existing contract is in effect going forward, you'd just be transferring $150M from one company you own to another.  So it's basically a wash.  My point is that in the current structure, the Angels get $150M/year from Sinclair/BSW and it's essentially pure profit.  BSW handles everything related to the broadcasts.

[Dtwncbad]

3 minutes ago, jsnpritchett said:

That's why I put it in quotes.  In theory (assuming no bankruptcy declaration before purchase and no re-negotiation of deals/debts), if the existing contract is in effect going forward, you'd just be transferring $150M from one company you own to another.  So it's basically a wash.  My point is that in the current structure, the Angels get $150M/year from Sinclair/BSW and it's essentially pure profit.  BSW handles everything related to the broadcasts.

If you can’t acquire Ballys at a price that makes it solvent and profitable then the idea probably doesn’t work.

But if you can then there is a ton of additional value in owning both entities, affording yourself a nice piece of flexibility in the ability to decide where the money or what portion of the money should reside (between the two entities).

And sorry to again be picking about terms but the $150m now going to the Angels is not pure profit.  It is top line revenue.

Given this, it helps illustrate why somebody would be interested in owning both entities with more control over the numbers (top line revenue in one company and operating expense in the other company).

The opportunity to maximize the overall efficiency of the contract between the two entities for the single owner is real.

[angelsnationtalk]