Coronavirus Shutdowns Causing Financial Pressure For Endeavor, Live Nation Entertainment and Sinclair Broadcast Group
As reported by Cynthia Littleton of Variety, the Coronavirus shutdowns have negatively impacted business and profits for many prominent sports media firms such as Endeavor, Live Nation Entertainment and Sinclair Broadcast Group. Originally predicted by Moody’s Investors Service, a major credit rating agency, companies that do not offer diversity in their operations would be more impacted in the sports-related shutdowns. Neil Begley from Moody’s stated that “live sports is one of the few programming categories that still garners large, predictable, nontime shiftable live TV audiences and the effect on advertising revenue and engagement will be significant.”
To make matters worse for an organization such as Sinclair Broadcast Group, the company recently spent $9.6 billion on the acquisition of 21 regional sports networks from Disney. An expense that will now take several more months to start earning profit against. Sinclair faces an uphill battle in providing replacement programming for its regional networks and reported at the end of 2019, $11.1 billion in total debt.
Endeavor, the parent company of UFC, WME and IMG, business revenue leans heavily on large events such as sports tournaments, fashion shows and festivals, all of which have been cancelled in the effort of social distancing. As of financial reports from August of 2019, Endeavor was showing long-term debt of $4.6 billion, $4 billion being associated with the acquisition of UFC in 2016. As these shut downs continues, analyst predicts Endeavor’s debt ratio will be closer to seven times its earnings.
Similar to its counterparts, Live Nation Entertainment, the nation’s leading event promotion firm is facing similar financial issues with their reported long-term debt being around $3 billion. Depending on how long the crisis continues, the company may have its creidt rating lowered, impacting its ability to refinance debt in the future.
Sinclair is currently working with leagues and regional teams to air classic games and documentaries, in hopes of still enticing viewers and bridging this layover while the country is still in crisis.