Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - The Looming bankruptcy of Sinclair sports networks

dustygoon · 10-28-2020, 10:01 AM

I haven't read all of this thread, but important to note that Sinclair the parent entity has bonds which trade around par (leverage is reasonable, generates cash), so it's ok. But Sinclair's sub Diamond Sports was the holdco for the new assets acquired from Disney (nice sell Walt!) where leverage exceeds 8.5x (broadcasters are worth 8x EV/EBITDA so equity under water). They had to do an exchange offer to restructure the new bonds used to fund the acquisition from Disney right out of the gate which means they overpaid for those assets. Dish cutting the fox RSN's from its lineup was key issue there. Then Hulu piles on (owned by Disney...cruel move Walt!). In the end, the sports RSN's have some value and should continue on after it is restructured (Sinclair's equity in Diamond gets wiped out and the debt holders become equity holders), but not what it once was.

Sports has tonnes of value in the future, but people don't want to consume it the old way through cable, satellite and local broadcast feeds (i'm sure people discussed this already). The mouse's next cutthroat move i guess will be to strike direct distribution deals with leagues/teams and stream those on HULU.

10-28-2020, 10:01 AM	#54
dustygoon Franchise Player Join Date: Jul 2004 Location: Bay Area Exp:	I haven't read all of this thread, but important to note that Sinclair the parent entity has bonds which trade around par (leverage is reasonable, generates cash), so it's ok. But Sinclair's sub Diamond Sports was the holdco for the new assets acquired from Disney (nice sell Walt!) where leverage exceeds 8.5x (broadcasters are worth 8x EV/EBITDA so equity under water). They had to do an exchange offer to restructure the new bonds used to fund the acquisition from Disney right out of the gate which means they overpaid for those assets. Dish cutting the fox RSN's from its lineup was key issue there. Then Hulu piles on (owned by Disney...cruel move Walt!). In the end, the sports RSN's have some value and should continue on after it is restructured (Sinclair's equity in Diamond gets wiped out and the debt holders become equity holders), but not what it once was. Sports has tonnes of value in the future, but people don't want to consume it the old way through cable, satellite and local broadcast feeds (i'm sure people discussed this already). The mouse's next cutthroat move i guess will be to strike direct distribution deals with leagues/teams and stream those on HULU.