Sinclair Broadcast looks for boost from sports betting, CEO tells shareholders

Sinclair Broadcast Group aims to eventually be the nation's biggest media company and expects a significant boost from legalized sports betting as it spreads across the United States, the CEO of the Hunt Valley-based company told shareholders Thursday.

“Sports betting is going to be a major tailwind for the company,” said Chris Ripley, Sinclair’s president and CEO, during an annual meeting attended by about a dozen shareholders at the broadcaster’s headquarters.


Sinclair said in May that it plans to partner with the owner of The Weather Channel to buy 21 regional sports networks and Fox College Sports from The Walt Disney Co. for $10.6 billion, a deal viewed as transformative for the broadcaster that has grown from Baltimore’s WBFF Fox45 in 1971 into the nation’s largest owner of broadcast television stations.

Sinclair also owns professional wrestling’s Ring of Honor and acquired the Tennis Channel in 2016. The broadcaster is launching a regional sports network with the Chicago Cubs. And it owns Stadium, a joint venture focused on college sports and professional highlights, and offers high school sports programming.


Ripley outlined three key benefits for Sinclair as it beefs up sports programming through the Disney acquisition, which is expected to close by the end of September. Betting on sports will help enhance viewer engagement, add a new category of advertisers and potentially allow Sinclair to get into the business of handling the betting itself, he said.

“Anytime you can add interactivity to your programming, and also skin in the game, where people have something at stake, the engagement levels go up,” Ripley said.

Seven states have legalized sports wagering, including Delaware, Pennsylvania, West Virginia and New Jersey, all of which did so after the U.S. Supreme Court struck down a congressional ban in May 2018. Maryland lawmakers failed in the recent legislative session to take up measures to allow sports betting and voters would need to approve such a move by referendum, but many other states are considering whether to legalize.

Advertisers trying to reach sports gamblers are starting to spend money in New Jersey and New York, and advertising demand is expected to increase as additional states legalize sports wagering, Ripley said.

Sinclair previously said it believes legalized sports betting, expected to grow into a $5 billion industry over the next six years, will attract fans and new advertisers to the regional sports networks.

Long term, Sinclair expects betting to be integrated into the media itself.

“So on the same screen, you’ll be able to watch and bet at the same time,” Ripley said, something that Sinclair could offer on both its regional sports networks and on the Tennis Channel. “We of course would promote responsible betting. … As of today, we are not a licensee. Whether we become a licensee down the road … is to be determined.”

Analysts have said live sports are becoming an increasingly important way to attract viewers.


But legalized betting on sports still is relatively new, and “media companies are trying to figure out what the potential market opportunities would be and how to monetize or participate in that,” said Tuna Amobi, a media and entertainment analyst with CFRA Research.

For Sinclair, sports betting likely represents a longer-term opportunity, he said.

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“It’s a safe assumption they will generate incremental revenue from licensing and advertising, but I don’t think in the next three to five years it will move the needle,” he said.

Sinclair’s growth strategy includes building upon its ownership of local TV stations, even after it lost its bid last summer to buy Tribune Media in a $3.9 billion merger, while expanding beyond broadcast, Ripley said.

Thanks to its successful ownership of the Tennis Channel and plans for the regional sports networks, Sinclair is entering a new chapter, the CEO said, responding to a shareholder’s question about the outlook for business in the next five years.

“Our ambitions in that new chapter are to become one of if not the largest media companies in the U.S.,” he said. “I can’t say we’ll get there in five years, but that’s where we’re headed.”


Ripley also announced that shareholders voted to reject a shareholder proposal to create a policy to improve board diversity. The City of Philadelphia Public Employees Retirement System, a stockholder, proposed that candidates for board seat openings include qualified women and minority candidates. A growing body of research shows a connection between the value of a company and the percentage of women and minorities on boards, the proposal said. Such policies have been adopted by governance committees of Amazon, Costco Wholesale, Facebook, Home Depot and others.

Sinclair has no women on its board. The board opposed the proposal as not in the best interest of the company.

“As the leader of this company, I am focused on making sure that we have diversity of backgrounds and opinions and skill sets,” Ripley said.