EW Scripps CEO Adam Singson
Source: EW Scripps
Including local TV station owners. sinclair Tegna and E.W. Scripps Everyone’s ratings plummeted this week. disney, warner bros discovery and Fox announced a new sports joint venture scheduled to launch this fall.
On Wednesday, Sinclair fell 12%, Tegna fell 7.2% and Scripps plunged 24%. Investors are weighing the implications of a new cable bundle of slimmer sports networks that includes ESPN, TNT and Fox but excludes CBS and NBC. Sinclair rebounded Thursday with a 7% gain, while TEGNA and Scripps were little changed.
But EW Scripps CEO Adam Simson said Wall Street’s reaction was overblown.
As an example, investors appear to be pricing in local ABC and FOX affiliates not participating in the new, slimmer bundle, Simson said in an interview with CNBC. He cited assurances from conversations with Disney executives that he said would be included. Scripps owns his 18 ABC stations and his four Fox stations in markets such as Phoenix, Detroit, Cleveland and Tampa.
“Affiliates will be compensated for accompanying them,” Simson said.
The joint venture will work with all local broadcast partners in a manner similar to other digital multichannel bundlers such as YouTube TV and Hulu with Live TV, said a person familiar with the matter, who asked not to be identified as discussions are ongoing. They plan to work together. It’s private.
This means consumers with the new bundle can get local news and sports from ABC and Fox.
A spokesperson for the joint venture declined to comment.
partial buffet
still, paramount globalCBS and comcast‘s NBC is not part of the new bundle, so these station affiliates are potentially at risk.
But only if the bundle takes off. That’s unlikely without these channels, according to Simson. At Scripps, he has nine CBS stations and 11 NBC stations.
“Wall Street acted like this was the product of a sea change,” Simson said. “I don’t have a problem with this opportunity or the idea that there’s value here. But let’s take March Madness as an example. You only have access to TBS and TNT, and you don’t have access to CBS. No, this is not an efficient bundle that Wall Street is creating.” That’s what’s going to happen. ”
An executive involved in the venture told CNBC privately that it would be a “monster,” but Mr. Simson disagreed with that premise. That’s because, in his view, sports fans won’t be satisfied with a partial proposal.
“People don’t want to go to a buffet where half the steam tray is missing,” Simson says.
Another sports-focused bundle of networks is FuboTV. The number of subscribers has not yet reached 2 million — and the new bundle offers more sports than you might expect.
Simson said smaller bundles priced at $40 or $50 a month probably won’t garner a large audience.
“If you’re a sports fanatic right now and need access to all live telecasts of your favorite sports, it’s best to keep your pay TV bundle as is,” he said. “It calls into question the value of the consumer proposition.”
Even if Disney and Warner Bros. Discovery are able to increase subscribers by bundling the new service with existing streaming services Disney+, Hulu and Max, the service will be backed by investors and the broadcaster. He pointed out that it should be considered as such.
“If a network affiliate like Scripps ends up receiving freight coverage on this platform in the same way that we do on other platforms, that becomes additional,” Simson said. There is a possibility that it will happen.” “It’s just another product within a product that’s already similar.”
WATCH: Disney CEO Bob Iger talks new streaming sports partnership
