Come next year, the Chicago Cubs are expected to exercise their right to open up their TV rights deal with WGN, which pays them a relatively modest sum for a little less than half of their games. In this era of exploding TV contracts, the Cubs believe they aren’t receiving market value, and no one really faults them for seeking out the best deal possible.
And, in that same vein, it appears that WGN will be returning the favor on the radio side. According to Ed Sherman (for the Tribune, a sister company with WGN), WGN will exercise their right re-open their radio deal with the Cubs, which expires after next season (like the TV deal).
The deal, which Sherman reports pays the Cubs around $10 million per year, was probably looking pretty sweet back in 2009, when it was initially signed. Ratings have plummeted along with the Cubs’ competitiveness, and I’d guess that radio also probably continues to lose “attention share” to other media.
The Cubs will have a modest amount of leverage in the renegotiations, as there are theoretical radio options on the market, but unless WGN has massively mis-read the market, it sounds like the Cubs will lose some money either way. In the end, the Cubs probably stick with WGN for radio, given the historical ties, if nothing else. The Cubs have been on WGN radio for almost 90 years, and it’s hard to imagine them being broadcast anywhere else. Still, no sense in not asking around, if WGN is going to force the issue.
That WGN is even looking to renegotiate the deal, though, underscores the fact that the team’s performance on the field over the past few years can have tangible negative effects on the future finances of the organization. Hopefully the TV negotiations are framed by “hope” much more than “past performance.” I imagine the Cubs would hate to lose $10s of millions of future dollars because the present product was weak (even if for understandable reasons).
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