A few weeks ago, I wrote about the bull and bear cases for Sinclair broadcasting, amidst the news that they may have to restructure the debt on the Fox Sports regional sports networks that had a lot less live sports inventory than expected during the pandemic. Today, shares opened up about 16 percent and as of 12:30 ET are up about 6.5 percent after they announced that they are selling their naming rights to the casino company Bally's for $85 million over 10 years and taking a 15 percent stake in the company with the potential to add 15 percent more.

Bally's plans to enter the mobile sports gambling space wherever it's legal and leveraging their relationship with the Sinclair RSNs -- which, combined, have about half of the local broadcast rights in the MLB, NBA, and NHL -- as a funnel for customer acquisition.

It's an interesting play, as these RSNs have been hit with the same business challenges we've seen with ESPN. The RSNs derive most of their revenue from carriage fees from cable and satellite providers and thus have been heavily affected by cord-cutting. Sinclair also has to address the fact that their RSNs have been dark for DISH satellite customers for over a year. The company is hoping to leverage the nearly 300 local FOX, NBC, CBS, ABC, and CW affiliates they own nationwide to get their sports channels back on DISH.

It's also interesting that Bally's -- which is based in Atlantic City and owns physical casinos in 10 states -- is another emerging player in the mobile sports gambling space. Other mobile gambling players include FanDuel (which has a partnership with OutKick), DraftKings, Barstool/Penn, PointsBet, William Hill/Caesar's, and Rivers. How this industry shakes out over the next several years will be fascinating to watch.

Note: A few weeks ago, I mentioned that I own Sinclair stock and had lost thousands of dollars on it over the last couple years. I decided to sell my remaining shares in it this morning, even though I still think it has an upside, especially when the DISH deal gets done. I just think there are better opportunities out there for me at this time. I was happy to get mostly back to even.

Bally's

Sinclair Sells Fox Sports RSNs Naming Rights to Sports Gambling Sponsor