As has long been expected, the Chicago Cubs have formally exercised an option to end their television broadcast deal with WGN-TV following the 2014 season, per a Chicago Tribune report. And, since the report is coming from the Tribune, owned by the Tribune Company (as is WGN), I tend to give it full credence.
This has been known to be coming down the pipeline. In fact, it was so expected that we colloquially refer to the Cubs’ TV rights with WGN being “up” after 2014, even though it was technically the Cubs’ option to back-out at that time. The Cubs will now formally begin negotiating the broadcast rights for the games that were allocated to WGN (a little less than half), with the other games still being held under an agreement with CSN through 2019. Those negotiations will begin with an exclusive negotiation period for WGN.
According to the Tribune report, WGN now has 30 days to meet the Cubs’ revised valuation for their rights, otherwise the Cubs can take the rights to market and see what’s available. Presently, the Cubs receive just $20 million for the 70 odd games broadcast on WGN – quite a sweetheart arrangement when you consider that the Dodgers recently inked a deal that will net them some $300 million per 162 games.
The tentative expectation has been that the Cubs will seek a short-term relationship – with WGN or another party – that will pay the Cubs an increased fee for their WGN games from 2014 to 2019. Then, the full slate of Cubs games will be available for a deal. This approach would decrease the Cubs’ expected take for the WGN games from 2014 to 2019 (broadcasters prefer long-term contracts that lock in rates), but would likely increase their take after 2019 dramatically (because a broadcaster would much prefer to buy the full slate of games, rather than a mere portion).
Alternatively, the Cubs could negotiate with CSN (partly-owned by the Ricketts Family) to bring the full slate of games over after 2014, but that’s an option that hasn’t fully been sussed out yet.
Best near-term bet? The Cubs return to WGN at a slightly increased rate for the five-year period from 2015 to 2019. From there, all bets are off.
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