CSN Houston is in Serious Trouble, and it Could Impact the Sports TV Landscape and Other Bullets

kid-watching-tvSafe travels today, if you’re headed anywhere in advance of the holiday. And if you are traveling, what better way to pass your time than with an epic new episode of the BN Podcast?

  • As we think about/dream on the Chicago Cubs’ next big television contract, particularly the one after 2019 which could come in tandem with a Cubs-owned network, it’s worth following the CSN Houston bankruptcy fight, which is getting ugly. The short version: the Astros own a large portion of the regional sports network, together with the Rockets and CSN. The network was supposed to pay the Astros $80 million per year for their games rights, but it hasn’t had enough money to meet those obligations (indeed, I believe the Astros have had to inject further money to keep the network afloat over the past year or so). The lack of money comes, primarily, from local cable and satellite systems’ refusal to pay the huge carriage fees charged by the network (which, in turn, sustains the huge money the network is supposed to be paying out to the Astros). All of this has led to a bankruptcy and an ugly fight, and money being lost by just about everyone involved.. For a longer, awesome-r version, here’s Wendy Thurm’s take.
  • Does this have direct relevance to the Cubs? Eh, at least indirect. The markets are different and the fandoms are different, but the concept is the same: how much longer can regional sports networks get away with charging huge carriage fees that are big enough to support massive TV contracts, but not so big that cable providers aren’t willing to pay them (by passing them on to every subscriber)? Something that would help the Cubs greatly (aside from the bubble not bursting, which is largely out of their control)? Play very, very good baseball from 2015 to 2019, and get those ratings through the roof.
  • The CCO chats with MLB.com’s prospect guy Jim Callis (formerly of BA), and there are a ton of interesting bits. Give it a read. Among Callis’ thoughts, he believes Javier Baez could be a Gold Glove caliber third baseman, he hears from scouts that are dubious Mike Olt can start 2014 on the big league roster, and he likes the college pitching the Cubs took in the 2013 draft, with special mention of Tyler Skulina (4th round) and Trey Masek (5th round).
  • It sounds like Chris Bosio is a big Kyle Hendricks fan.
  • In early calculations, it’s looking like the free agent price of a win (as in, 1 WAR) is about $6 million this year. Inflation!
  • A ton of former Cubs are on the Hall of Fame ballot released yesterday, and MLB.com wrote up pretty much all of them (you can see the articles mixed in here). Speaking of which, Deadspin bought a Hall of Fame vote.
  • The Iowa Cubs are looking for a new mascot – which is to say they’re looking for folks to don the Cubbie Bear costume for games next year. You could earn $40 per game for shaking your artificially-inflated rump. Hell, I still do it for free!
  • Don’t forget to check out BN’er Chris’s book on the last 105 years of the Cubs, and his special offer for BN’ers.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

37 responses to “CSN Houston is in Serious Trouble, and it Could Impact the Sports TV Landscape and Other Bullets”

  1. Fishin Phil

    “The Iowa Cubs are looking for a new mascot – which is to say they’re looking for folks to don the Cubbie Bear costume for games next year. You could earn $40 per game for shaking your artificially-inflated rump. Hell, I still do it for free! ”

    Hansman, please report to the white courtesy phone.

    1. DarthHater

      This^^^

    2. ssckelley

      Introducing the new ICubs mascot:

      vector-of-a-happy-cartoon-bulldog-mascot-eating-a-tasty-cheeseburger-by-lafftoon-43851.jpg

    3. hansman

      I protest to the “artificially-inflated rump” part. This is all natural!

  2. Lao Tzu

    I recently moved to the Philly area along with my Directv contract. Due to their standoff with Comcast, I cannot watch any Flyers or 76′ers and only get about 10% of Phillies games (usually on Sundays).

    At some point, this whole system has got to crash.

  3. Chris S

    “All of this has led to For a longer, awesome-r version, here’s Wendy Thurm’s take.”

    Was there supposed to be something else there?

    1. Wester

      Click on the hyperlink

  4. Spoda17

    The whole TV thing is like the mortgage crisis… it is going to crash. People just aren’t going to pay these ridiculous prices. There are so many other options than TV nowadays.

  5. itzscott

    CSN/Houston…

    This is a prime example of how these big cable contracts only work if there’s a WINNING team behind them which captures the attention of fan, draws new ones in and thereby increases viewership ….. which allows the hefty ad rates to pay for it all.

    Hopefully Ricketts, Kenney and Epstein are paying attention.

    1. bbmoney

      winning helps.

      It also helps to have more than 40% of the households in the area being able to access to the station.

    2. JB88

      I actually DON’T think a winning team is really the issue. The issue has been getting the station on the various cable outlets. And, I think a big reason for that is that only two teams own any stake in the network (the Astros and the Rockets). In Chicago, Comcast is owned by the Cubs, Sox, Bulls, and Blackhawks. It is also the primary station for talking about the Bears. In other words, it is more or less “must see” TV for Chicago sports fans.

      And, it is also already established as a basic tier cable station, meaning that you aren’t going to have the insane start up costs that CSN Houston is having (which, unlike the Chicago station, wasn’t launched until October 2012, whereas the Comcast Sports Chicago has been on the air since I believe at least 2005).

      While it certainly wouldn’t hurt the Cubs’ negotiating position to field a better team, I don’t think this is really an apples to apples comparison.

      Now, all that said, my bigger concern is still that the bubble for big sports television contracts will burst before 2019. If history is any prelude to the future, the Cubs’ timing always seems to suck.

      1. itzscott

        Well, the economics of it all boil down to ad revenue and how much can be charged for a commercial spot. Those charges are based on both demographics and the number of “eyeballs” tuned in. Ad revenues subsidize the viability of TV/Cable contracts.

        No surprise that a winning team attracts more interest/viewers than losing teams. More viewers = higher ad rates.

        The Cubs have been losing. TV/radio viewership/listenership, along with attendance have shown steady declines year over year. Comparing those numbers to when the Cubs had competitive teams bear it all out.

        The Cubs need to field a winning team in order for their master plan to work.

        1. JB88

          You are correct that ad revenue drives the sorts of contracts that sports teams can pull in, but I think that you are incorrectly viewing this through the lens that the bargaining power of CSN Chicago is limited to what CSN Chicago can pull in with only the Cubs. The power of that station is again based on the nearly year round TV coverage and the nearly 24 hour sports coverage it offers. CSN Chicago has immense bargaining power because it broadcasts the vast majority of Sox, Cubs, Bulls, and Blackhawk games, plus has college sports programming, sports talk programming, etc.

          In other words, it is a regularly viewed channel meaning that Comcast’s ability to pull in viewers isn’t limited to Cubs viewers. With greater bargaining power comes greater ads, period. If the Cubs improve, that only improves Comcast’s bargaining power, but it isn’t an either/or proposition.

    3. terencemann

      I don’t really think the Comcast contract is about winning so much as it is about the former owners manipulating the market and getting a contract they probably thought could be a win/win for them regardless of the cost to the next Astros owner or for the franchise. They used it to get a good deal for selling the team and, if it worked out, they’d make money form their ongoing investment in the network.

      I don’t think people are getting that the contract was a terrible idea for the network in the first place and that’s how we got here.

  6. Cubbie in NC

    I was just reading about other options so that I can ditch my Direct tv. I have had it for the last 15 years primarily for sports and the Baseball package. (since I have been out of the Cubs market for a long time) I have a feeling the market not wanting to bundle their tv services, is going to lead to a change in the finances of teams and their tv deals.

  7. jon

    In early calculations, it’s looking like the free agent price of a win (as in, 1 WAR) is about $6 million this year. Inflation!

    So does that mean Mike Trout is worth 60 million a year?

    1. Edwin

      If he was available today as a free agent, and you projected him to be worth 10 WAR, yes.

    2. CubFan Paul

      The Giants inflated that number up to $6M. Take them out and its normal.

      They’re the only ones overpaying so far.

      1. J.L.

        You think Marlon Byrd is worth a 2-year $16 million contract?

        1. CubFan Paul

          That’s cheap for whats been thrown around on the outfield market (last year too).

          Byrd has .300 bat tool and can slug

          1. Rebuilding

            Marlon Byrd is the poster child of why you cheat and take a 50 game suspension. His bat speed had slowed and he was done. Now he’s got another $16 million

            1. hansman

              Well then he has taken PEDs AFTER his suspension. He sucked until about June this year and then went beast mode.

              I think it was an overpay for him because it seems every player who is capable of playing until their late 30′s has 1 AMAZING season from age 35-40 and then falls back off the cliff.

              1. Rebuilding

                I think he just moved on to better stuff. There is no excuse for an MLB player with his resources to get caught taking something that can actually be detected. Way too many things that can’t be

  8. cavemencubbie

    I have never seen a CSN sports program. However, if I have to pay to see the Cubs AND still watch the effing ads, they can go to HE double L. I have ad burnout. Everywhere I look there are ads. I have to take it for a free service but I’ll be damned to have to pay for it.

  9. terencemann

    I’m excited about Hendricks and the possibility for finally seeing a payoff from a “major league player for prospects” trade finally coming to fruition for the Cubs but I don’t see why they would put him on the opening day roster if the front office is being as cost conscious as they seem to be. I’m not arguing that losing one year of free agency for Hendricks is a big deal but I just don’t believe the front office is going to punt that year for a team that could be worse on opening day than it was on opening day last season (of course they could be a heck of a lot better by mid-season but that’s another discussion…)

  10. mdel78

    Based on some info I’ve heard on this (I actually do know people involved – woohoo!), and without divulging too much I have heard, Brett has done a great job with his coverage and speculation. A lot of the stories I have heard from both sides line up with a lot of the comments Brett has speculated in his analysis (maybe it’s his legal background.)

    One thing I wanted to pass along, since I’ve heard it a couple of places now, is that the political parties involved want a conclusion sooner rather than later, even if that conclusion is a lawsuit. They don’t want to be perceived as the hold-up and, quite honestly, some of them are getting more blame than they should. However, if there is a lawsuit, they can point to that as the delay and step out of the spotlight a bit.

    Take this all with a grain of salt. I’m a little disappointed with the disproportionate amount of spin I hear with everyone I spoke with, but I guess that’s politics (and why I’m not in them.)

    1. mdel78

      Argh… posted this on the wrong page. Sorry!

  11. Rebuilding

    Oh for the simpler times of running home from school and flipping on WGN to hear a toasty Harry announce the 7th, 8th and 9th. I don’t think the Astros make much of a difference – bad baseball town, bad baseball and bad execution by the network. If Comcast was dragged kicking and screaming into carrying Big Ten Network for a premium they’ll carry a Cubs Network. With the rise of Netflix, Roku and other streaming services by 2019 it might not even be necessary to have such a deal. Just make it a subscriber channel

  12. itzscott

    >> Oh for the simpler times of running home from school and flipping on WGN to hear a toasty Harry announce the 7th, 8th and 9th. <<

    Ain't that the truth!

    But for me it was Jack Brickhouse (Hey-Hey!) and Vince Lloyd.

  13. Funn Dave

    What’s the gist of the Deadspin article? I can’t get the page to load. Thanks in advance.

  14. aCubsFan

    There are no more Dodgers broadcast deals. That bubble has already burst. Cable TV subscribers have constantly seen their monthly bills increase, and they are fighting back by using different devices: cellphones, PCs, tablets and alike to watch their favorite programming. At the same time the producers of content are demanding a higher broadcasting rights to cover their content creation costs, but cable companies like Comcast are ‘fighting back’ by blacking out content creators. It’s a vicious cycle that’s not going to end.

    For the Cubs to maximize their broadcast rights, they’re going to have to drive more fans to the online MLB broadcast. And for those who think they’re ever going to get rid of advertisements from any broadcast they’re highly mistaken. No matter if you watch Hulu, Netflix, cable, or over-air programming their will always be advertising.

    1. cavemencubbie

      You are no doubt right about advertising. That said, I have stopped watching the NFL on whatever, dropped my Facebook account and started to watch old westerns on Encore. I may pay good money to Comcast and Encore, but no adds! I thought it a joke that CBS wanted more money from a cable company to play their content. It would seem to me that it should be the other way around, as the cable company was adding more viewers of CBS advertising.

  15. MightyBear

    I’m glad to see Bosio in on Hendricks. I’ve been touting Hendricks on this site for awhile. Good to see I got somebody on my side who knows a hell of a lot more about pitching than anybody on this site does.

    1. SenorGato

      Hopefully that quote threw him on someone’s radar….His numbers would look mighty appealing to many a FO these days, so maybe he can help out land someone that upgrades the ML roster. The Tigers’ success with Fister for instance might make him interesting enough to maybe like him in a Porcello dea?

    2. Edwin

      What did Bosio say? I don’t have a subscription so I wasn’t able to read the article. Bosio said a lot of good things about Chris Volstad too, and that didn’t work out.

      http://www.bleachernation.com/2012/02/24/chris-bosio-hearts-chris-volstad/

      I respect Bosio as a pitching coach, and he certainly knows more about actual pitching than I do. But that doesn’t change the fact that most guys like Hendricks with weak stuff don’t stick too long in MLB. Hopefully Hendricks turns out to be an exception to the rule.

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