Cubs TV Deal Stuff

[Crack Wilson]

Last night's game nearly doubled the average rating for the season: http://www.chicagotribune.com/sports/smackblog/chi-cubs-tv-ratings-20140904-story.html

 

Not bad since last night's game wasn't overly note-worthy, and Rizzo and Castro were known to be out too. Can't hurt the negotiations for 2015+ partial rights.

I hoped that would be the case. Could that in any way influence staying with WGN? Or is it a done deal already? A lot of fringe fans around the country like myself will be cut out... just when the team is getting very watchable.

WGN America is on record stating they're done with Chicago sports, which makes perfect sense since live sports is the only reason anyone still has cable or satellite.

Thank you.

[jersey cubs fan]

http://www.chicagotribune.com/business/ct-cubs-tv-rights-0922-biz-20140922-story.html#page=1

Mark Gonzales ‏@MDGonzales · 10m

Cubs TV rights deal in late innings http://fw.to/IQATRdF

 

 

Saw this on twitter, but I can't see the article itself.

[Guest]

http://www.chicagotribune.com/business/ct-cubs-tv-rights-0922-biz-20140922-story.html#page=1

Mark Gonzales ‏@MDGonzales · 10m

Cubs TV rights deal in late innings http://fw.to/IQATRdF

 

 

Saw this on twitter, but I can't see the article itself.

Just google the article title and click the link from there.

[Guest]

Weird, it loaded okay for me.

 

With one week left in the season, and its expiring agreement with WGN-Ch. 9, the team has yet to announce broadcast plans for 2015 and beyond. Sources say the Cubs are exploring everything from a private equity partnership to a new regional sports network, but a long-term deal may not be imminent.

 

"Wait till next year" won't work with advertisers and TV stations. Sources say the Cubs are under increasing pressure to find a short-term solution, perhaps even a return to Tribune Media, with whom negotiations are ongoing.

 

An announcement is expected as soon as this week, according to sources. Cubs spokesman Julian Green declined to comment.

 

The Cubs opted out of an agreement with WGN-Ch. 9 last year, freeing up about 70 games on television, ostensibly ending a relationship dating to 1948. The move enabled the Cubs to sync up expiring broadcast and cable rights after the 2019 season.

 

Launching a regional sports network in 2020 could mean big bucks for the Cubs, who earned about $60 million between Comcast SportsNet Chicago and WGN-Ch. 9 this season. The team received about $500,000 per game from CSN, and about $250,000 per game from Channel 9, according to sources. The Los Angeles Dodgers, who launched their own cable network this year with Time Warner Cable, are earning a reported $8.35 billion over 25 years, or about $2 million per game.

 

Banking on a regional sports network in 2020 is still a gamble for the Cubs. There are indications that the prices that cable subscribers are willing to pay for local sports may have peaked with the Dodgers deal. Nearly two-thirds of Los Angeles viewers have been shut out from viewing games this season because other cable and satellite operators refuse to pay a higher premium for the Dodgers network.

 

The Cubs may be looking to hedge their bets by bringing in outside investors.

 

Sources say the team is in negotiations with TPG Capital, a Texas-based private equity firm with deep roots in sports and entertainment, to be a partner in monetizing broadcast rights.

 

TPG, founded in 1992 by David Bonderman, manages $66 billion of capital, including a 35 percent stake in Creative Artists Agency, a Los Angeles-based talent agency that represents top actors, musicians and more than 650 professional athletes.

 

A spokeswoman for TPG declined to comment.

 

The closest parallel to a Cubs-TPG partnership may be the YES Network, home of the New York Yankees, which formed in 2002 with Goldman Sachs and Providence Equity Partners owning a combined 40 percent of the network. The equity firms divested their stakes this year when 21st Century Fox took majority ownership of YES, a deal that valued the network at $3.9 billion.

 

More than a decade later, it is a very different game. Cable cord-cutting and a la carte pricing threaten to change the subscriber ecosystem. Meanwhile, the struggles to expand Dodgers games to more systems in Los Angeles, and the recent bankruptcy of a Comcast sports network in Houston amid distribution issues and ownership squabbles, may portend a down-slide in valuations for regional sports networks.

 

Still, some industry experts say launching a regional sports network in 2020 is likely a good gamble.

 

"Regional sports networks are going to continue to be highly valuable content," said Doug Perlman, founder and CEO of Connecticut-based Sports Media Advisors. "They may look different by 2020 than they do today. They may be delivered in different ways and viewed on different devices. But at its core, sports content is the content about which people are most passionate."

 

Unlike other major markets, Chicago has only one regional sports network, making a competitor likely and viable, according to industry experts. One potential partner is Fox Sports, which has the local TV rights to 15 Major League Baseball teams and owns 22 regional sports networks around the country, including the YES Network.

 

Fox Sports previously had a regional sports network in Chicago but lost the rights to the Cubs, White Sox, Bulls and Blackhawks when the teams banded together in 2004 to form Comcast SportsNet Chicago.

 

Fox Sports had preliminary discussions with the Cubs before this season, but talks never progressed, according to industry sources.

 

Another potential partner is Root Sports, owned by a subsidiary of DirecTV. Root, formed in 2011, has regional sports networks in Seattle, Denver and Pittsburgh, and it's looking to take over Comcast SportsNet Houston.

 

AT&T's $48.5 billion acquisition of DirecTV, pending approval by the Federal Communications Commission and the Department of Justice, may make Root a bigger player in the regional sports network game, according to some industry experts. The merger will create a combined subscriber base of nearly 1 million households in Chicago — 590,000 for DirecTV and 391,000 for AT&T, according to SNL Kagan — guaranteeing clearance if an RSN were to be launched here.

 

A spokesman for DirecTV Sports Networks declined to comment.

 

Comcast is also getting bigger, with its $45 billion acquisition of Time Warner Cable pending regulatory approval. Comcast SportsNet Chicago does not have a right of first refusal for the Cubs' cable rights in 2020, according to sources, but it may have the inside track. In addition to its broad distribution — it has 1.54 million subscribers in Chicago, according to SNL Kagan — the network may be able to strike a deal to air the displaced WGN games over the next five years, as part of a back-end agreement to create a second regional sports network.

 

A spokesman for Comcast-owned NBC Sports Group, which oversees 11 regional sports networks, including CSN Chicago, declined to comment.

 

Another potential option come 2020 may be going over the top — cutting out the cable middleman and launching a Cubs streaming network. Baseball streaming rights are controlled by MLB Advanced Media, which offers all out-of-market games on a subscription basis, with teams sharing the revenue equally. Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Whether that sets the table for a pure over-the-top Cubs network is unclear, but it may argue for waiting to see how the streaming market plays out before committing to any long-term rights deal.

 

But signing up a TV partner for 2015 cannot wait, and options may be limited. Before the season, the Cubs reached out to a number of Chicago stations, but sources said talks never progressed and no active discussions are taking place at NBC-owned WMAQ-Ch. 5, ABC-owned WLS-Ch. 7, Fox-owned WFLD-Ch. 32 and WPWR-Ch. 50.

 

It is unclear whether talks have taken place with CBS-owned WBBM-Ch. 2, and a station spokeswoman declined to comment. In June, CBS Radio struck a long-term deal with the Cubs to air the games on WBBM-AM 780, wresting the radio rights from Tribune Media's WGN-AM 720.

 

Meanwhile, Tribune Media may soon have a second Chicago TV station that could air Cubs games. Industry sources said Fox Television Stations Group is looking at "trading" WPWR-Ch. 50 for KCPQ-Ch. 13, Tribune Media's Fox affiliate in Seattle. This month, WGN-Ch. 9 announced that it would air six overflow Bulls games this season on WPWR, indicating that Tribune Media expects the station swap to go through, according to sources.

 

The Cubs are also said to be exploring some alternative short-term solutions, including airing the games on a digital subchannel of a local TV station. Such multicast signals are available over the air and on most cable systems but are usually filled with reruns, old movies and specialty offerings, not live Major League Baseball games.

 

Chicago-based Weigel Broadcasting owns WCIU-Ch. 26, which has been carrying Cubs, White Sox and Bulls games for years through a deal with WGN-Ch. 9. It also operates Me-TV, the largest multicasting network in the U.S. Weigel has not been contacted by the Cubs regarding either broadcasting or multicasting opportunities.

 

"There's been no communication between us and the team," said Neal Sabin, vice chairman of Weigel Broadcasting.

 

The Cubs, while still in last place in the National League Central, have made on-field progress this season with a slew of young prospects. But years of dismal play have resulted in low ratings and poor ad sales for WGN-Ch. 9, which, sources said, is losing about $200,000 per game under the current contract.

 

Still, Tribune Media may be the most likely option for keeping the Cubs on local TV, and there are signs of progress in hammering out a short-team deal.

 

"We're in conversations with the Cubs to this day, we've been their partner for 70 years, and I'd love to see us stay with the Cubs," Tribune Media CEO Peter Liguori said at an investor conference last week. "But, we want to do it on economic terms that make sense to both of us. And you know, (Cubs Chairman Tom) Ricketts and I are in conversation and we hope there's resolution soon."

 

[SouthSideRyan]

Thanks TT

[SouthSideRyan]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

[Andy]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

It does mean subscribers to the channel.

[Guest]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

 

Yeah, if WGN is only making 50k per broadcast, then that's like 90% on WGN and 10% on the product they're televising.

 

My understanding is that the 'over the top' option would basically be like WatchESPN. Prove you have whatever channel that's broadcasting locally to be able to stream it. Doesn't sound like a super option to me, although we're still what, 5.5-6 years from that eventuality? 5.5 years ago WatchESPN was ESPN360 and looked wayyyy different than it does now.

[SouthSideRyan]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

 

Yeah, if WGN is only making 50k per broadcast, then that's like 90% on WGN and 10% on the product they're televising.

 

My understanding is that the 'over the top' option would basically be like WatchESPN. Prove you have whatever channel that's broadcasting locally to be able to stream it. Doesn't sound like a super option to me, although we're still what, 5.5-6 years from that eventuality? 5.5 years ago WatchESPN was ESPN360 and looked wayyyy different than it does now.

 

The thing is, a physical channel still needs to exist on local cable, otherwise what's to stop you from offering the product to national base, thus violating blackout restrictions. I don't see what the Cubs gain from it financially.

[Guest]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

 

Yeah, if WGN is only making 50k per broadcast, then that's like 90% on WGN and 10% on the product they're televising.

 

My understanding is that the 'over the top' option would basically be like WatchESPN. Prove you have whatever channel that's broadcasting locally to be able to stream it. Doesn't sound like a super option to me, although we're still what, 5.5-6 years from that eventuality? 5.5 years ago WatchESPN was ESPN360 and looked wayyyy different than it does now.

 

The thing is, a physical channel still needs to exist on local cable, otherwise what's to stop you from offering the product to national base, thus violating blackout restrictions. I don't see what the Cubs gain from it financially.

 

I'm confused on what you guys are talking about.

 

It seemed like TT was talking about MLB allowing people who already can watch games to stream them on MLB TV thing and SSR is talking about like a Cubs streaming network or something? Otherwise I'm at a loss as to what TT's talking about.

 

Admittedly, I haven't read the article so maybe that explains it.

[WrigleyField 22]

The former does nothing for our issue at hand. The latter- I don't know if we can monetize the same as an actual TV deal.

 

 

Sent from my iPhone using Tapatalk

[Guest]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

 

Yeah, if WGN is only making 50k per broadcast, then that's like 90% on WGN and 10% on the product they're televising.

 

My understanding is that the 'over the top' option would basically be like WatchESPN. Prove you have whatever channel that's broadcasting locally to be able to stream it. Doesn't sound like a super option to me, although we're still what, 5.5-6 years from that eventuality? 5.5 years ago WatchESPN was ESPN360 and looked wayyyy different than it does now.

 

The thing is, a physical channel still needs to exist on local cable, otherwise what's to stop you from offering the product to national base, thus violating blackout restrictions. I don't see what the Cubs gain from it financially.

 

Right, I don't really see the appeal either. I was only saying that 5+ years is a lifetime for a young distribution channel like that. It's probably going to change, maybe wildly, before the Cubs are actually making such a decision.

[Hairyducked Idiot]

That article sure makes it sound like 2015's TV rights are not drawing interest and we'll go crawling back to WGN at a discount.

[Irrelevant Dude]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

[Guest]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

 

Even once they do what they're going to do, you would need to be an existing TV subscriber capable of watching those games on television.

[Guest]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

 

As soon as next season? Almost certainly no. By 2020 or so? Not out of the question.

[SouthSideRyan]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

 

As soon as next season? Almost certainly no. By 2020 or so? Not out of the question.

 

I'd bet it's out of the question. There is a lot of money tied up in cable deals that depend on being the exclusive in-market homes for local teams. How big of a check does MLB want to cut to each of these RSNs?

[mul21]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

 

As soon as next season? Almost certainly no. By 2020 or so? Not out of the question.

 

I'd bet it's out of the question. There is a lot of money tied up in cable deals that depend on being the exclusive in-market homes for local teams. How big of a check does MLB want to cut to each of these RSNs?

 

I guess I don't understand why MLB wouldn't want it to be viewable in the "local" area if you're already able to see it on cable. Just have another tier it runs on and show all the commercials like they do on TV and cable gets their cut from having additional eyeballs watching.

[jersey cubs fan]

Am I reading too much into the article to think that, as soon as next season, there could be another tier of MLB.tv that also allows the live streaming of local games?

 

I have no idea how that could impact teams financially, but as a consumer I would love that it finally gives me a legitimate opportunity to cut the cord entirely.

 

As soon as next season? Almost certainly no. By 2020 or so? Not out of the question.

 

I'd bet it's out of the question. There is a lot of money tied up in cable deals that depend on being the exclusive in-market homes for local teams. How big of a check does MLB want to cut to each of these RSNs?

 

I guess I don't understand why MLB wouldn't want it to be viewable in the "local" area if you're already able to see it on cable. Just have another tier it runs on and show all the commercials like they do on TV and cable gets their cut from having additional eyeballs watching.

 

Cables co's assume they will lose subscribers if those people have the choice to not subscribe to cable.

 

They want to use live sports channels as a way to keep you locked into play $0.35 for the food network and $0.55 for E! etc. etc.

 

It used to be about fooling random shmoes who don't care about sports to still have to pay for those channels by keeping them on regular tiers, but it is also becoming about forcing fans of local sports team to pay $ for all the channels they don't care about.

[mul21]

Right, but if you have to provide verification of ability to see it otherwise (like ESPN's service is now) they're not losing anything, just gaining eyes on commercials that may not otherwise be watching, like a guy at work watching on a tablet or laptop for day games.

 

Edit: The additional tier I'm referring to above is one that would be on MLB.TV for local subscribers.

[WrigleyField 22]

And if it's this verification idea, it solves nothing of the Cubs' 2015 dilemma since they have 70 games with no local channel to validate.

 

 

Sent from my iPhone using Tapatalk

[SouthSideRyan]

Right, but if you have to provide verification of ability to see it otherwise (like ESPN's service is now) they're not losing anything, just gaining eyes on commercials that may not otherwise be watching, like a guy at work watching on a tablet or laptop for day games.

 

Edit: The additional tier I'm referring to above is one that would be on MLB.TV for local subscribers.

 

The article references the walls being broken down for those users. There's no issue there, it just won't generate any needle moving dollars.

 

The issue is those looking for in-market access without the requisite channels broadcasting the game. It ain't happening.

[seanimal]

I refuse to believe WGN is only making 50K per Cubs broadcast.

 

Local teams are currently blacked out, but the league may enable authenticated subscribers to stream in-market games by next season, according to executives.

 

Does authenticated mean subscribers to the channel that is locally broadcasting the game? If it doesn't mean that, I can't see it as anything but a bad thing for us. I really doubt MLBAM is broken up by 2020

It does mean subscribers to the channel.

 

i'm not sure this assumption is correct. the context of the quote is that they would be skipping broadcast ota altogether and providing access to the games via streaming service exclusively

 

Another potential option come 2020 may be going over the top — cutting out the cable middleman and launching a Cubs streaming network.

 

authentication just means login access. in this case, gaining access to the streaming service

[seanimal]

direct subscription is an interesting idea, mostly because if the team wants to make any money, they have to be good and keep subscriptions up

[CubsInNC]

With MLB losing ground annually to the NFL, in terms of fan popularity, TV ratings, and advertising dollars, do you think it may be on Manfred's mind to do away with the "superstation tax"? Allowing more national broadcasts of games, getting the more popular teams in front of more eyeballs on a regular basis? And if it's a possibility, could the Cubs be looking to get a short term arrangement, before launching the Cubs network (nationally) in 2020?