AT&T’s auction to sell four regional sports channels falls short

AT&T’s auction to sell four regional sports networks appears to be faltering — the latest sign that the business of airing local sports is in trouble as Americans continue to cut their ties with cable.

The wireless giant has received multiple bids for its group of four sports channels covering markets around Seattle, Denver, Pittsburgh and Houston — but all of them came in around or below $500 million for the lot, significantly short of expectations estimated to be around $1 billion, sources told The Post.

The key stumbling block: AT&T admitted to bidders that over the next 12 months it expects its regional sports networks, or RSNs, will suffer a drastic plunge in EBITDA — a closely watched metric of profitability on Wall Street.

Updated financials show that EBITDA (earnings before interest, taxes, depreciation and amortization) for 2020 will fall to about $55 million, from $115 million last year.

The lead bidder is Sinclair Broadcast Group, the conservative-leaning TV station owner that scooped up 21 regional sports networks, or RSNs, from Disney in August, sources said.

Since receiving the underwhelming bids late last year, AT&T has not moved on an offer — raising concerns that it might cancel altogether, sources said.

“They don’t need to sell,” said a source with knowledge of the auction, which includes the rights to air games of teams such as the Houston Rockets, the Seattle Mariners and the Pittsburgh Penguins.

AT&T declined to comment. Sinclair didn’t return a request for comment.

The troubled sale is the latest evidence of the swift and brutal deterioration of a once-coveted broadcasting niche that Sinclair has piled into, even as concerns over cord-cutting mount.

That includes Sinclair forking over $10.6 billion, together with minority investors, to buy Disney’s RSNs, which offer programming from the Los Angeles Clippers, the Dallas Mavericks and the St. Louis Cardinals.

Separately in August, Sinclair’s new sports subsidiary, Diamond Sports Group, bought a 20 percent stake in the Yankees’ YES Network, valued at $346 million.

The free fall comes as RSNs are getting squeezed on all sides. Teams are demanding more for the rights to broadcast their games even as cable companies fight to pay less to carry the networks or, in the case of Dish Network, start dropping them altogether.

AT&T’s Pittsburgh RSN, for example, reached a new multiyear deal in recent months with the Pirates baseball team that will significantly cut into its profits, the source said. It’s also bracing for at least one more team to play hardball later this year, the source said.

“The RSNs are doing worse than the overall cable model,” said analyst Rich Greenfield of LightShed Partners.

“When you have Sinclair being dropped by Dish and Dish not suffering … the future for the industry does not look good,” Greenfield said.

Greenfield was referring to billionaire Charlie Ergen’s satellite TV company Dish Network, which pulled the plug on the 21 RSNs Sinclair had agreed to buy one month before the deal was sealed. There are fears it could do the same to others, including AT&T.

Sinclair’s stock has reflected these woes — down nearly 35 percent since May. Sinclair CEO Chris Ripley says the market is missing the “huge” impact Sinclair will gain from the growth of online betting.

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