EW Scripps CEO Adam Symson
Source: EW Scripps
Local TV station owners including Sinclair, TEGNA and EW Scripps all saw their valuations plummet this week after Disney, Warner Bros. Discovery and Fox announced a recent sports three way partnership set to launch this fall.
Sinclair dropped 12% Wednesday, TEGNA fell 7.2% and Scripps plummeted 24% as investors weighed the meaning of a recent, skinnier cable bundle of sports networks that may include ESPN, TNT and Fox but will pass over CBS and NBC. Sinclair bounced back by rising 7% Thursday, but TEGNA and Scripps were little modified.
But Wall Street’s response is overblown, based on EW Scripps CEO Adam Symson.
For one, investors seem like pricing in that local ABC and Fox affiliates would not be a part of the brand new skinnier bundle, Symson told CNBC in an interview. They shall be included, he said, citing assurances he’s been given in conversations with Disney executives. Scripps owns 18 ABC stations, in markets equivalent to Phoenix, Detroit, Cleveland and Tampa, and 4 Fox stations.
“Affiliates are going to be compensated for being carried along,” Symson said.
The three way partnership will work collaboratively with all local broadcast affiliate partners in the same manner to other digital multichannel bundlers, equivalent to YouTube TV and Hulu with Live TV, based on an individual aware of the matter, who asked to not be named since the discussions are private.
This implies consumers of the brand new bundle will give you the chance to get their local news and sports from ABC and Fox.
A spokesperson for the three way partnership declined to comment.
A partial buffet
Still, Paramount Global‘s CBS and Comcast‘s NBC should not a part of the brand new bundle, putting affiliates of those broadcast stations potentially in danger.
But provided that the bundle takes off. Which, based on Symson, is unlikely without those channels. Scripps has 9 CBS and 11 NBC stations.
“Wall Street acted like this was a sea change product,” Symson said. “I do not take issue with the chance or the concept that there’s value here. But take March Madness. You are only going to have access to TBS and TNT, but not CBS. It isn’t the efficient bundle Wall Street is making it out to be.”
While one executive related to the three way partnership privately told CNBC it can be “a monster,” Symson disagreed with that premise, because, in his view, sports fans won’t be satisfied with a partial offering.
“People don’t desire to go to a buffet where half the steam trays are missing,” Symson said.
FuboTV, one other sports-focused bundle of networks, has yet to succeed in 2 million subscribers — and it offers more sports than the brand new bundle is probably going.
A smaller bundle at a price of $40 or $50 per 30 days probably won’t have a big audience either, said Symson.
“Should you’re a sports nut today and you would like access to all of the live telecasts of your favorite sports, you are best off maintaining the pay TV bundle because it is,” he said. “It calls into query the worth of the buyer proposition.”
Even when Disney and Warner Bros. Discovery are capable of juice subscriber additions by bundling the brand new service with existing streaming services Disney+, Hulu and Max, he noted the service needs to be viewed by investors as supportive of broadcast stations.
“If network affiliates like Scripps shall be compensated for carriage on this platform like we’re on other platforms, it’s potentially additive,” Symson said. “It’s just one other product amongst products which can be sort of already the identical thing.”
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