Sinclair Unit Secures Financing Amid Push Into Streaming

As a result of these contracts, Sinclair will be able to offer a subscription streaming service that allows consumers to watch local-market games for 16 NBA teams and 12 NHL teams without having a cable or satellite TV package.

Sinclair’s Diamond Sports Group LLC, a subsidiary that owns the company’s portfolio of 21 sports networks, has been working toward building a streaming service. The sports channels were branded as Bally Sports in a 2020 licensing deal with casino operator

Bally’s Corp.

“This financing and the NBA deal, combined with the NHL deal done back in December, paves the way for us to launch our direct-to-consumer offering with all of our NBA and NHL teams,” Sinclair Chief Executive

Chris Ripley

said in an interview.

Mr. Ripley said Sinclair has Major League Baseball digital-rights deals in some of its markets.

Regional sports networks, once engines of growth for media companies due to the high fees owners were able to charge cable and satellite companies to be included in traditional pay-TV packages, have been hit hard by cable cord-cutting. Pivoting to streaming has become a high priority.

Diamond has a hefty debt load of more than $8 billion, stemming from Sinclair’s acquisition of sports networks from

Walt Disney Co.

in 2019 for $10.6 billion. Sinclair’s creditors were bracing for a possible restructuring as of late 2020, The Wall Street Journal reported.

Several of those creditors have signed on to provide additional financing. Bloomberg reported last week that Sinclair was nearing the financing deal.

The company is planning for a so-called soft launch of the streaming app in the second quarter, meaning it would be available only in some markets, Mr. Ripley said. A broader rollout to the rest of the company’s markets will happen by the third quarter, he said.

Mr. Ripley said all of the live games featured on Bally Sports networks will air on the streaming service when it launches.

He declined to disclose the pricing for the streaming service. He said it would be “consistent with some of the other premium sports services in the marketplace.” The NBA’s League Pass carries out-of-market games for $28.99 a month, or $139 annually.

Sinclair and its peers will have to navigate a tricky path, trying to build streaming businesses for their regional sports networks without hurting their traditional TV business.

“All research points to very minimal cannibalization,” Mr. Ripley said. “There is a growing fandom outside of the (cable) bundle happening. Regardless of where sports ends up being housed, we need to have a product for both.”

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com