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Sinclair CEO says he's pivoted to local news and sports to avoid streaming services 'sea of blood'

The upcoming war among streaming services is going to mean "losses for many years to come for many of those companies who are going to be engaged in a major share battle."

Sinclair Broadcasting President and CEO Christopher Ripley has one of the most powerful positions in the country when it comes to local news — and now sports, after the company’s $9.6 billion acquisition of the former Fox/Disney-owned Regional Sports Networks in August.

Sinclair also acquired a slice of the New York sports channel YES Network, in a partnership with Amazon. In a recent interview, Ripley talked about the upcoming presidential election, Sinclair’s “fair and balanced” news in light of broad criticism for airing "must-run" segments with conservative viewpoints, and the “sea of blood” that is the streaming wars. This interview has been edited for brevity.

Q: You have said 2020 could be the biggest year in history for political advertising. Why?

A: President Donald Trump is ahead of all previous benchmarks in terms of fundraising. In 2016, Hillary Clinton had significantly more funds than Trump — and a typical Republican candidate would have had more funds than Trump. What tends to happen in political advertising is politicians don’t return the money afterwards, they spend it all. You’re going to have two presidential candidates who will have fundraising unlike anything we’ve previously seen and whatever gets raised gets spent.

Image: Chris Ripley.
Chris Ripley.Courtesy of Sinclair

Q: What are your thoughts when President Trump dismisses the media with the phrase “fake news?”

A: It doesn’t really play on our business. Whenever he talks about fake news he’s largely targeting people who are on opinion-based networks on a national scale. Local news is very fact based and really has very little in terms of commentary added to it. So, it’s not something that is really an issue.

Q: Would you say Sinclair presents both sides of the news, or that you offer a slant on it?

A: We pride ourselves on offering fair and balanced reporting and making sure we present both sides.

Q: Do you have any must-run segments that you’d regard as being left leaning or offering a Democratic point of view?

A: We do offer commentary, but there is a conservative commentator and there’s a liberal commentator.

Q: You have conservative commentator Boris Epshteyn, a former campaign spokesman for President Donald Trump. Is there anybody who represents the left?

A: Ameshia Cross.

Q: What are your plans for the RSNs, the regional sports networks? You got them for a much lower price than was pegged at the beginning of the process.

A: Undoubtedly it was a great outcome, driven by the lack of media companies and well-heeled strategic acquirers who were in the process. They either could not have got approval from the Department of Justice, or were distracted by other events. So we were really the only ones in the process — which led to the price we paid.

For the future we see a lot of growth for the RSNs, and because of sports betting getting legalized across the country. That has three main impacts. We think it will have a big impact on viewer engagement. It will add interactivity for the younger generation, and it will add skin in the game which always makes people focus more. The second big impact from sports betting will be a brand new ad category that didn’t exist before. By most estimates, $1 billion. That’s new money coming in to buy inventory on the RSNs that didn’t exist before.

Q: Will you run political advertising on the RSNs?

A: They have had some in the past, but not nearly to the extent that local broadcasters do. We think it’s a good opportunity to expand their advertising revenue base. They have some of the best programs on TV, with the most engaged audiences, and from an advertiser perspective there’s really no reason why they shouldn't be targeting those audiences more.

Q: What are your plans with regard to the acquisition of the YES Network with Amazon?

A: We’re very excited by the partnership with Amazon and the Yankees in the YES Network. Amazon is going to be experimenting with a set of games here, providing them over-the-top and adding new features to the viewer experience, like more data, different audio tracks. They’re going to be focused on innovation and improving the consumer’s viewer experience.

Q: ESPN has had a tricky time with staff making comments that are deemed political. Do you have any rules in place for when politics inevitably collides with sports and popular culture?

A: We have a policy for all of our employees to leave their politics at the door when it comes to content, and sports would be no different. It is always a risk in a big organization where you have lots of people creating lots of content, and we deal with that on the news side all the time. It will be no different

Q: What are your thoughts on the streaming wars and the future of the pay-TV ecosystem?

A: Streaming wars are something we’ve been predicting for quite some time, and about five years ago we saw this phenomenon of peak TV continuing to grow — and now its called the streaming wars. It’s the reason why we have pivoted to local sports and local news. We think that’s going to be a sea of blood. It’s going to be losses for many years to come for many of those companies who are going to be engaged in a major share battle. For a company of our modest size it wasn't going to be a place we could create a long-term sustainable business. We consciously wanted to focus on sports and news and our RSN transaction has helped us in a big way, reposition our company for long term success in light of what’s going to happen in the years to come here.

Q: Where do you see the future for big media companies and cord cutting? Is there a robust future for traditional broadcast TV?

A: What you are seeing on the pay TV bundle is an evolution to more modern interfaces and user experiences. You have many providers providing antiquated experiences that are not competitive with a Netflix-like experience. You're just seeing migration of subscribers from those antiquated systems to more modern systems that don't require set-top boxes and have unlimited DVR ability to skip commercials or not. That sort of experience is what people are rolling over to right now.