Politically divided America is “very good for our business,” says Sinclair Broadcast CEO; The primary advertising surge indicates a major autumn transport

A sharp political divide in the United States has led to a surge in TV advertising spending, with primaries in Ohio, Pennsylvania and other key states indicating a massive increase in fall deadlines.

A major cash flow recipient is Sinclair Broadcast Group, the second largest owner of local television in the United States. Company CEO Chris Ripley offered his views on political advertising and other topics at the ninth edition of MoffettNathanson’s Media and Speech. Communication Summit.

“Some of the early races are crazy,” Ripley said. They took him to Ohio, where Jay D. Vance, a US Senate candidate backed by Donald Trump, won a tough battle. The $ 75 million spent on the first TV commercials was 40 times more than in previous elections, Ripley said, and four times more than in the previous general election.

“On the one hand, I’m sorry we’re in the political environment we’re in,” Ripley said. “On the other hand, it’s very good for our business.”

The rise in primary spending indicates a record decline over the medium term, which Ripley calls “big money” in the third and fourth quarters.

Ripley was careful not to clap, but her company’s local TV station is known for its highly partisan commentary. At the end of 2019, she decided to end her controversial “essential” segments of opinion, which include personalities like Boris Epstein, a former Trump administration official.

States that will hold major elections for governor and congressman through November include Ohio, Pennsylvania, Wisconsin and Arizona. “The stakes are high here,” Ripley said, noting that other states where Sinclair’s main stations are located, including Georgia, Kansas, Michigan, Nevada, Maryland and Maine.

Spending on TV-related commercials is another emerging area, Ripley noted. “More and more problems go straight to the polls,” she said. “When it comes to abortion rights, it adds to that category.” Legalization of sports betting or cannabis are other issues that require significant publicity.

During the 45-minute conversation, Ripley covered many other topics besides politics. Sports broadcasting has been a hot topic as the Sinclair-controlled Diamond Sports Group is poised to smoothly launch a number of direct clients of the regional sports network. (Diamond took over 21 networks previously operated by Fox and disbanded in a 2019 Disney deal, later renaming them Bally Sports.)

Asked by moderator Michael Nathanson what opportunities the sport offers, Ripley said, “We will reach 80 million homes. We know that about half of them do not receive RSN. this is huge [total available market] Here’s where we can apply. “

The prospect of bringing highly profitable cable sports networks into the era of cable television packages is inexplicable. Although NBCUniversal hinted that it is reviewing broadcast versions of its RSNs, the economy is different at both the industry and consumer levels.

Ripley said the general streaming climate is beneficial to the prospective Diamond customer, who will need a fairly solid monthly payment. The price isn’t over, but according to Sinclair’s latest forecasts, that figure is around $ 225 per year, or $ 20 per month. Given fans’ enthusiastic enthusiasm for their home teams, Ripley described it as an “attractive price” during a recent call.

In Moffet Nathanson’s session, he expanded on this point of view. The entire streaming environment is “streamlining what was inevitable,” he said, referring to Netflix’s recent setbacks and signs of withdrawal from some other players. “It means they will be more profit-oriented, which means they will raise prices.” Netflix is ​​already pretty aggressive when it comes to raising prices. This means that the relative value equation for “regional sports facilities” will also be improved.

Even at high prices, the fact that there are no additional costs for the content works in Diamond’s favor. This is in stark contrast to many other subscriber streams.

“I’m often asked about CNN +,” Ripley said, referring to a service that launched WarnerMedia and then shut down hundreds of millions of startups after the new Warner Bros. Discovery business leaders. “They were going out and trying to create a completely different service” from their linear network. “We are taking the core of our existing service and building it for another group of people. This is a fundamentally different proposal ”.

Diamond subjects have the right to broadcast Major League Baseball, NBA and NHL games. When they launch in June, they will only have five markets for MLB given the league’s strategic interest in broadcast rights. When asked about the status of the remaining rights in other MLB markets, Ripley said they are actively trading.

When asked how both traditional and virtual MVPDs would respond, Sinclair by putting regional sports at the top of the list and allowing users to bypass pay TV, Ripley said sports and news have yet to keep traditional television. “I don’t think MVPDs like DirecTV are willing to take the risk and go without any major products,” she said.

Leading satellite provider Dish Network and its Internet-based YouTube TV package are among the distributors who rejected Bally Sports’ terms, leading to closures across much of the country. “MVPDs really want this content,” Ripley said. “To a certain extent we have already crossed the Rubicon directly in relation to the customer. We had to negotiate this just years ago. So everyone wants this content, they know their subscribers want it. “