The owners of more than 60 local TV stations, whose stocks plummeted after this week’s shocking news about a joint venture to create a sports bundle, accused Wall Street investors of overreacting.
EW Scripps CEO Adam Simson, who saw his company’s stock fall more than 27% after Fox, Disney and Warner Bros. Discovery announced standalone services on Wednesday, The impact on the company’s affiliated companies was downplayed.
“Affiliates will be compensated for accompanying them,” Simson told CNBC.
“This is not the efficient bundling that Wall Street is striving for.”
Scripps owns 18 ABC stations in markets including Phoenix, Detroit, Cleveland and Tampa, and four Fox stations among its 66 stores.
Simson told CNBC he received assurances from ABC’s parent company, Disney, that the local channel’s content would be included in the so-called skinny bundle.
Other major local TV station owners, including TEGNA and Sinclair, also saw their stock prices fall.
Sinclair, which operates about 200 stations in the U.S. including the Tennis Channel, fell 12% on Wednesday and is down nearly 9% this week.
TEGNA, owner of 68 TV, which includes True Crime Network, has fallen nearly 7% since the news broke.
Simson said the reaction was overblown, as investors seemed to forget that the local ABC and Fox affiliates would be added to the sports network’s new, slimmer cable bundle, which includes ESPN, TNT and Fox.
“Wall Street acted like this was a game-changing product,” Simson told CNBC.
“I don’t have a problem with this opportunity or the idea that there’s value here. But let’s take March Madness for example. You only have access to TBS and TNT, you don’t have access to CBS.”
The as-yet-unnamed service is expected to launch in the fall and will work in conjunction with all local broadcast partners in a similar manner to other digital multichannel bundlers such as YouTube TV and Hulu with Live TV. Then CNBC reported. The people familiar with the matter requested anonymity because the discussions are private.
Future operations also won’t include NBC’s “Sunday Night Football” or NFL games on CBS, which will air the Super Bowl this year.
Mr Simson said viewers would not be satisfied with a partial offer.
“People don’t want to go to a buffet that doesn’t have half a steam tray,” Simson said, according to CNBC.
According to CNBC, consumers planning to purchase the new bundle can expect to get local news and sports from ABC and Fox.
Representatives for Scripps did not immediately respond to The Post’s request for comment.
AP
The new package is expected to cost more than $40 a month, but it still won’t cover the full range of sports available on cable.
Robert Thompson, executive professor of television, radio and film at Syracuse University’s SI Newhouse School of Public Communication, said this price point could mean cable TV is not destined to disappear. He said that there is.
“I don’t think this is the final nail in the coffin of pay TV,” Thompson told the Post Thursday.
“If you like sports and start adding up the money, you’ll end up paying at least $40 for the service, but you’ll still want to watch NFL games that aren’t on the platform,” he added. “You’re going to want them anyway.”
