Sinclair Broadcast Group held their third quarter conference call today for stockholders. During the conference call, SBG CEO & President Christopher Ripley was asked about the amount of money spent on tennis and wrestling by Aaron Watts of Deutsche Bank Securities, Inc and he had positive things to say about Ring of Honor calling it an “unpolished gem.” You can read a transcript of the exchange between Watts and Ripley below:
Aaron L. Watts – Deutsche Bank Securities, Inc.
Okay, great. And then, maybe just one more bigger picture. I think, somewhat unique from some of your peers, you’ve put a lot of money to work in non-local content initiatives via Tennis Channel, college football, wrestling. As you said today, can you maybe give us your vantage point on how you would say those investments are working out versus maybe your initial expectations? And, do those experiences affect your mindset about acquiring more content platforms of a similar vein going forward, you’re obviously sitting on a lot of cash in an enviable position on that front. So, just curious about that that experience.
Christopher S. Ripley – Sinclair Broadcast Group, Inc.
Sure. So, look I think saying that we’ve invested a lot of money is maybe a slight mischaracterization. Beyond Tennis, we really haven’t spent significant dollars on content and Ring of Honor, I think, we bought for a couple hundred thousand dollars. And it’s, we think that’s an unpolished gem that ultimately should be something in the same light as WWE. We actually sold out Madison Square Gardens for an event next year which is pretty (00:24:46) in 11 minutes. So, we know that that that brand has potential. It just – it hasn’t, we haven’t quite found the right dials to turn yet, but we keep increasing the grass roots support on it and it has just a very, very loyal and avid fan base which is what you really need to explode a brand.
And on the syndicated side, we have we’ve been smart about investments there, using our leverage to not only reduce our costs there but also get equity positions in various – or equity like positions in various programs with little-to-no capital. So that’s been a very profitable endeavor for us. And then on Tennis, which we did spend a decent chunk of change buying, it was a net price of $285 million and further investments in Tennis.com and Tennis magazine and you probably just saw that we signed up the WTA for a five-year deal and we’ve also expanded other rights in other categories, like the French Open where we put more premium matches on our air and then also revamped our OTT app.
So, it’s been an investment period for Tennis and Tennis is setting up exceptionally well for future growth with 2020 will be the breakout year for Tennis in a big way. And that’ll be the year where we sit back and look and say, wow, we really – all this work and investment that we put in has paid off in spades as 2020 looks to be a huge year for Tennis.
So, I guess, the overall question to your answer is when I look across what we’ve done in content, we’re in varying stages of development, but we’ve always had a good return on everything we’ve done, but I wouldn’t say that we’ve spent all that much risk capital when you consider the scale of the company overall.
Radican’s Analysis: It’s a big deal for ROH to be brought up during a SBG conference call for stockholders and for Ripley to praise the company publicly and say it has the potential to be seen in the same light as WWE is a big indication of how selling out Madison Square Garden for G1 Supercard next year during WrestleMania weekend elevated the profile of the company in the eyes of Sinclair. The company has expanded its budget since buying the company and has put effort into making competitive money offers to talent and improving production.
Riley also was measured with his comments saying that the dial needs to be turned up before ROH reaches its potential. ROH has a lot of work to do going forward. Nothing is confirmed yet, but given Cody Rhodes’s recent comment on Twitter about not being at G1 Supercard and his commitment to stay together with Kenny Omega, The Young Bucks, and Adam Page in terms of deciding where they go as free agents, the company stands to lose all of its biggest acts come Jan. 1 when all of their contracts with ROH expire. Cody’s contract has already expired and he is working on a handshake deal with the company through the end of the year.