Bally’s Brand Heading to Sinclair Sports Networks, Gaming Company Buying Bet.Works for $125 Million
Posted on: November 18, 2020, 06:15h.
Last updated on: November 18, 2020, 08:54h.
In another sign of rejuvenation for the Bally’s brand, the gaming company will reportedly attach its name to 21 regional sports networks (RSNs) owned by Sinclair Broadcast Group. That marks perhaps the boldest tie-up to date between a casino operator and a television network.
The news was initially reported earlier this evening by the New York Post and arrives a week after the transformation to Bally’s (NYSE:BALY) by the company formerly known as Twin River Worldwide Holdings (TRWH) was completed.
Under the terms of the deal, Bally’s will pay Sinclair $85 million over 10 years to attach its name to the RSNs, according to the Post. Sinclair also gets a 15 percent interest in the Rhode Island-based gaming company, which is worth about $137 million, based on Bally’s market capitalization of $913.10 million at Wednesday’s close. The broadcaster can add another 15 percent in the gaming operator in the future if certain financial objectives are realized.
With the transaction, the Bally’s brand joins forces with networks that have broadcasting rights for 12 NHL, 16 Major League Baseball (MLB), and 17 NBA franchises, meaning those leagues need to greenlight the combination, potentially bringing about a giant step forward in the relationship between US sports associations and the gaming industry.
Sinclair acquired the 21 RSNs from Walt Disney for $10.6 billion last year as part of the latter’s efforts to divest some assets to gain regulatory approval for its acquisition of 21st Century Fox. At the time, the networks, which bear the Fox Sports name, were reportedly valued at least $16 billion.
However, cord-cutting, some cable providers abandoning RSNs, and the coronavirus pandemic combined for a toxic brew for regional sports broadcasters. That forced bondholders to become skittish, because Sinclair paid just $1.4 billion in cash for the networks. The rest was financed via a mix of junk debt and loans.
While the Bally’s partnership doesn’t make Sinclair whole on the RSN deal, it’s a step in the right direction. For the gaming company, it’s the latest in a series of moves aimed at restoring luster to a once iconic brand, bolstering its sports wagering footprint and adding to geographic diversity to what was a sleepy regional gaming outfit.
It was just over a month ago TRWH announced the purchase of the Bally’s brand for $20 million from Caesars Entertainment (NASDAQ:CZR). Currently, there are just two casinos — one apiece in Atlantic City, NJ and Las Vegas — bearing the Bally’s name. But that number is likely to vault past a dozen in the coming months, as the company’s rebranding effort takes shape. Caesars maintains controls of Bally’s on the Strip.
Prior to the Bally’s news breaking, there was speculation the Sinclair assets could take the FanDuel name or come full circle and sport Fox Bet branding. UK-based Flutter Entertainment (OTC:PDYPY) controls both of those gaming firms.
Separately, Bally’s said it’s paying $125 million in cash and equity to acquire sports betting platform provider Bet.Works, the latest in a series of moves by the buyer to become a major player in the sports wagering industry. Half the purchase price will be funded with the buyer’s shares.
Bet.Works’ clients include gaming operators in Colorado, Indiana, Iowa, and New Jersey.
When Bally’s wraps up pending purchases, it will operate 14 land-based casinos in 10 states, eight of which allow mobile sports betting. The Bet.Works acquisition is slated to close in the first quarter of 2021.