🏦 Sinclair May Be Headed for Chapter 11

More than usual, there is a lot of money riding on Patrick Mahomes. Or more specifically, this week, Mahomes' ankle.

The Kansas City Chiefs opened as a 2.5 point favorite in their AFC Championship tilt against the Cincinnati Bengals.

But questions linger about the high ankle sprain to Mahomes' right ankle sustained in Saturday's win over the Jacksonville Jaguars. As of this writing, the Bengals are now favored by one.

This line will continue to move as news on Mahomes' condition keeps coming out.

Kudos to the sharps who already middled this thing, i.e., took the Bengals and the points at the beginning of the week and then took the Chiefs and the point.

In the email today:

1) Sinclair property Diamond Sports Group potentially headed for $8.6B debt restructuring. 😳

2) Louisiana audit discovers $1M overpayment to LSU head coach Brian Kelly 🏈

3) DraftKings to adopt Positive Play Scale as part of Responsible Gaming efforts. 🤝

By the way, we think Chiefs/Bengals is a stay away. Just load up on the Eagles.

1) DIAMOND SPORTS GROUP RUMORED TO FILE CHAPTER 11 BANKRUPTCY, RESTRUCTURE $8.6B OF DEBT 🤷‍♂️

Every bubble bursts.

Sinclair Broadcast Group currently owns the cable and streaming rights to 21 Major League Baseball clubs. Now Sinclair finds itself wildly overextended, due in no small part to the extortionate terms it agreed to with MLB clubs.

"When you can't borrow another buck from the bank...you light a match."

Kevin Reichard covered this story (h/t Bloomberg) for ballparkdigest.com:

• Sinclair is considering a Chapter 11 bankruptcy filing to restructure $8.6 billion in debt and potentially renegotiate broadcast deals with teams partnering with Bally Sports.

• The bankruptcy filing would allow Sinclair to skip debt payments and liquidate assets, such as regional sports networks, to creditors like Prudential Financial and Fidelity.

• MLB is reportedly refusing to overhaul its rights strategies to bail out Sinclair and may gain control of cable and streaming rights for the regional sports networks.

• This could accelerate MLB's movement toward a streaming-first broadcast strategy, as cord-cutting and changing viewer habits shift away from traditional sports programming.

• MLB faces an existential challenge to adapt to these changes and attract younger, mobile viewers, while also retaining its aging fan base.

That last bullet point is key because it touches on MLB's primary dilemma.

MLB regularly touts the success of the game's efforts to appeal to younger fans. This is crucial on two levels. First, the younger fans are going to be around longer. Second, they're generally tech-friendly. Streaming games doesn't bother them.

At least for now, though, most of the bills are being paid by MLB's main demographic. Per a sponsorpulse.com post following the 2022 World Series, "53% of US residents between 13-64 have engaged with the MLB in the past year. Among engaged audiences, 56% are male, and the most engaged group is between 35-54 years old."

The Sinclair bankruptcy, if it happens, will not immediately affect consumer access to MLB games. Regional sports networks will still broadcast games in the short term as the dust cloud settles.

But this development definitely suggests that a hard pivot to streaming, and eventually even some pay-per-view profit-taking, isn't as far away as consumers might hope.

2) LOUISIANA LEGISLATIVE AUDITOR'S OFFICE DISCOVERS $1M OVERPAYMENT TO BRIAN KELLY 💰

College football coaches earn generational money as things stand. Further proof of just how silly the money has become came with this item:

The Associated Press laid out the particulars of this story:

• LSU accidentally overpaid football coach Brian Kelly by $1 million in the first year of a 10-year, $100 million contract.

• The error occurred because of duplicate payments made to Kelly's LLC and to the coach directly.

• The double payments were made from May to November and were detected by LSU officials.

• LSU and Kelly have enacted an adjusted payment schedule to recoup the overpayment by the end of fiscal year 2023.

• Kelly was hired by LSU after the 2021 season when the Tigers had their first losing season since 1999, and exceeded expectations by winning the SEC West Division and finishing 10-4 in his first season.

A million dollars may seem like a rounding error given Kelly's huge contract, but it is still a lot of money especially in the context of LSU's financial picture.

Per Holly Duchmann of businessreport.com, LSU's athletics department lost $10 million in 2021. "The athletics department brought in $199.3 million in revenue last year while keeping expenses to $197.3 million."

LSU football, unsurprisingly, is keeping the whole operation running in the black, barely. "The school's football program generated $95.1 million last year and made a net profit if $35.7 million — a nearly 19% increase from last year."

We will leave it to the tin foil hat types to suggest whether anyone involved here might not have minded Coach Kelly hanging onto this extra million given LSU football's sudden resurgence on and off the football field.

What this story really prompts from us is this thought: If this happened to the tune of a cool million at this one program....

3) DRAFTKINGS PARTNERS WITH GAMRES ON "POSITIVE PLAY SCALE" RESPONSIBLE GAMING TOOL 👍

Perhaps the largest obstacle facing online sportsbooks as they seek legalization in more states is the (justified) fear of creating a populace of addicted gamblers.

We reported recently on the Ohio Casino Control Commission's borderline angry response to what it called "the very rocky start of sports betting" in the Buckeye State.

The sportsbooks' best defense to this problem is probably a good offense, as DraftKings appears to have decided:

Per the press release:

• DraftKings and Gamres announced a collaboration to introduce the Positive Play Scale to DraftKings through an online survey to select U.S. customers.

• This will be the first time a multi-state online U.S. gaming operator will incorporate the Positive Play Scale tool into its responsible gaming program.

• The Positive Play Scale is the first ever standardized scale to measure responsible gaming beliefs and behaviors among players.

• The adoption of the Positive Play Scale will assist DraftKings in optimizing safer play.

• Gamres will prepare and administer an online survey to a U.S.-based sample of DraftKings players using the framework of the Positive Play Scale.

• Gamres will analyse the survey results to provide a baseline measure of Positive Play at DraftKings, and to identify differences in certain player groups and how DraftKings may refine its responsible gaming practices to advance positive play.

Dr. Richard Wood, a Gamres researcher, described the goals and methodology of the Positive Play Scale. "Most players just play for fun and to be entertained," Dr. Wood said, but some players "have misperceptions about gaming that can...lead to them spending more than they intended."

DraftKings' Senior Director of Responsible Gaming, Chrissy Thurmond, added that DraftKings "strives to be the industry gold standard" in responsible gaming.

Is some of this posturing? Probably. DraftKings is vying for market share and for licenses in numerous states as online sports betting continues to be legalized.

Just because it's posturing doesn't make it bad. Anything that halts or mitigates problem gambling can only be a societal benefit.

JOB LEAD OF THE DAY 💰

Continuing on the theme of societal good, this job caught our eye today.

Coordinator, RBI for Major League Baseball. RBI stands for Reviving Baseball in Inner Cities. The job is based in New York City, a baseball city if there ever was one.

The job duties include but are not limited to "assistance and coordination of programming, planning, promotion of...PLAY BALL, Pitch Hit, and Run/Jr. Home Run Derby, and other MLB Jewel programming and events."

This is a typical starting point job, with a salary range from $50,000-$65,000.

If your goal is to make a career in baseball, though, this is a foot in the door.

WHAT ELSE IS GOING ON? 😎

• NIL money continues to enrich female college gymnasts, which is great, but we cannot understand how this story does not really address the question of whether the money is flowing to the best athletes...or the best-looking athletes. 🤸‍♀️

• To the heartbreak of many Orange County baseball fans, Arte Moreno is no longer planning on selling the Los Angeles Angels. ⚾️

• Mikaela Shiffrin is the winningest female skier in history, but that doesn't mean she will cash in during a non-Olympic year. ⛷

WHAT TO KEEP AN EYE OUT FOR BEFORE THE NEXT SEND 👁️

• Professional athletes in Massachusetts want protection from abuse from disgruntled losing bettors as online sports betting becomes legal in the state on January 31. ⚖️

• The FCC may fine Fox Corporation $504K for "transmitting EAS (Emergency Alert System) tones during a Fox NFL promotional segment in the absence of an actual emergency."

• No one knows what NBC Sports is going to do about Tony Dungy's lingering (alleged) anti-LGBTQ leanings. 🌈