kid-watching-tvJust as we would look upon what the Detroit Tigers were able to get in trade for Doug Fister (yuck) for guidance in what the Cubs could get for Jeff Samardzija, we can look at the recent Phillies TV deal for guidance in what the rights fees market is bearing for similar teams in similar settings. That’s not a perfect parallel, of course (the player trade market is a much more walled-off system, far less subject to idiosyncrasy, politics, regulation, viewing market, etc.), but it’s similar enough that it’s a worthy exercise.

We heard on Friday that the Phillies had nailed down their big money TV deal, but we didn’t hear the price. Now we have, per Matt Gelb: it’s “more” than $2.5 billion over 25 years. That’s “only” $100 million per year (starts lower, and grows over time), or just $617,000 per game (in a 162-game season, though some of those games are owed to the national contract, we stick to 162 for comparison purposes). Compared to the Dodgers’ new deal which nets them more than $2 million per game, did the Phillies just get Fistered? And are the Cubs screwed by a rapidly falling market?

… nah. Setting aside the indication that the deal is for “more” than $2.5 billion, Gelb reports that the Phillies are getting a share of the advertising revenue during games (a nice hedge both for the network and the team), and the Phillies will get a 25% equity stake in the network. It’s impossible to say how much annual value that will provide to the Phillies (if the broadcasting of their games is a success, they’ll do very well – if not, they won’t do as well, but the $100 million is a baseline (minus any equity hit)). It appears to be a very nice deal in balancing the attractiveness of live sports programming with the possibility of erratic performance over the 25-year span of the deal. And it’s probably worth a heck of a lot more than $100 million annually.

Unfortunately, in the end, I don’t know that this deal provides a whole lot of guidance for the Cubs, partly because a lot of the value in the deal is obscured to us, and partly because of the Cubs’ unique TV rights situation (as discussed Friday).

Throw in the fact that the Ricketts Family already owns 25% of CSN Chicago, and things get even more complicated. The nearest equivalent here would be a long-term deal with CSN Chicago to take on all of the Cubs’ games, plus an advertising split, with the per-game rate and advertising split being a bit higher to reflect the fact that the Cubs wouldn’t be taking any additional equity stake. Or maybe the Cubs/Ricketts do take on a higher equity stake? Who knows. Like I said, it’s a unique situation. (To that end … do the Ricketts use the revenue from their 25% ownership of CSN* Chicago to operate the Cubs? Are the “Phillies” really getting that ownership stake, or are the “owners”? That doesn’t really matter for most teams, but given the Cubs’ reported spending restrictions tied to Cubs revenue, I think it really might matter in this case, at least in the near-term. Yes, I have more questions than answers. So it is with the Cubs’ financial situation right now.)

Long story short: the Phillies got paaaaaid, despite the headline number not looking as enormous as we might have liked to have seen. The impact the Cubs in their TV deal search is probably neutral.

*(When the Ricketts Family purchased the Cubs, all reports had them taking a 25% stake in CSN Chicago. Subsequent descriptions of CSN’s ownership have indicated it is just 20%.)

  • BenRoethig

    Its its 20%. Comcast/NBC and the 4 teams all get a 20% take

  • http://bleachernation.com woody

    I hope that they can do the deal with CSN. I live in northern Indiana and CSN is part of my basic cable package. I heard some speculation about FOX possibly using the local Chicago area affiliate to broadcast the games that WGN was airing. That wouldn’t work for all of the cub fans outside of the greater Chicago area. I hope when it is all resolved that I don’t end up paying extra to see the games not broadcasted by CSN.

    • BenRoethig

      it might. WFLD is Corporate owned by Fox, so they have the Fox Sports money. They could also offer the games to affiliates in Illinois, Indiana, and Iowa like they do the Bears Pre-Season games.

  • http://www.michigangoat.blogspot.com MichiganGoat

    It seems the easy choice to deal with the WGN games would be to add them to CSN rework that contract through 2019, and then consider starting a Cubs network.

    • BenRoethig

      CSN is stuffed as is. They’d really need to add a second channel to add 70 more Cubs games.

      • http://www.michigangoat.blogspot.com MichiganGoat

        That might actually work nicely into the idea of having a Cubs network.

        • BenRoethig

          It could also solve the Bulls-Hawks log jam in the winter replacing CSNC+. Have one channel be Sox-Bulls and the other be Cubs-Blackhawks

      • http://bleachernation.com woody

        I think they have a CSN plus channel. Last year in my area the non WGN games were at times broadcast on three different channels. A few times WCIU picked them up nd other times it was Comcast using a secondary channel. It is confusing for sure.

  • http://www.survivingthalia.com Mike Taylor

    LMFAO @ “Did the Phillies just get Fistered?”

  • Fastball

    I don’t think the Phillies have a fan base or could ever dream of nationwide television audience. Ever see a Phillies fan ouside of Philly? I used to live on the coast and if you don’t live in Philly nobody is interested in the Phillies. They are sandwiched between the Met’s, Yankees to the north and the Orioles and Nat’s to the south and the Pirates to the West. Very small geography for TV market. So this deal is probably great for them based on where they are located and size of fan base. Outside Philly its minimal. Cubs on the other hand have a very large national tv base and very large regional tv base, Illinois, Iowa, Indiana, NW Ohio, W Michigan. It’s huge in comparison. I don’t even count the Whitesox as a competitor. There following is a pimple on the Cubs butt when it comes to TV following. The Cubs will get a much larger revenue deal for its TV than Philly. Too bad they didn’t take on some payroll to keep the team competitive before this TV deal started rolling around. That was some short sited vision on Ricketts part. $40 or $50MM over a couple years would have went a long way toward having a fanbase that was much happier than it currently is. He didn’t need to field a playoff team just close to one. Cubs fans nationwide would have stayed more plugged into the Cubs everyday. I think that might have been a very costly mistake. Might even hurt his sponsorhip revenues at Wrigley as well.

    • Cizzle

      Unfortunately I’ve met a few Philly fans out here in Colorado.

      • Danny Ballgame

        Yeah I know a ton of Philly guys from CSU that live across the state

        • Danny Ballgame

          All dicks

  • Fastball

    I already have to buy a sports package with AT&T Uverse and on my Directv at my lake house and the MLB package for all the games. If the Cubs don’t play on WGN I could care less. If somebody wants to watch the Cubbies they will pay the Cable co. or Fios or Uverse sports package and be done with it. Pay for view TV is here to stay. Just like the over the air network is dead. Times are a changing and nobody can stop it.

    • Big City Mick

      Over the air TV is not dead, in fact, I’d predict a monumental rise in OTA TV over the next few years. The reason for this is the gaining popularity of streaming services like HuluPlus, Netflix, Amazon Instant Video, etc. Also, other major corporations like Microsoft, Sony, Google, etc. are all trying to enter this arena by buying up entertainment content to develop their own streaming subscription services. For those consumers that cut the cable cord and switch to streaming media, they’ll need an OTA antenna to capture live local broadcasts.

  • TommyK

    You also have to factor in that the Cubs are about to have yet another 90 loss season, which will contribute to an even greater decline in viewership, which will reduce the value of the TV rights. In contrast, someone might actually WANT to watch the Phillies play.

  • Cey It

    Speaking of CSN and lack thereof from Mediacom can someone help with a MLB.tv question in Des Moines… I think I have seen this discussed before. If I have the premium service do I still have blackouts?

    • Big City Mick

      I believe MLB.tv blackouts games that would be considered your local/home market. So, if you would normally get CSN Chicago with your Des Moines cable TV subscription then you might not get those games on MLB.tv. Are you planning on streaming MLB.tv or subscribing to it with your cable TV company?

  • Cey It

    Thanks Big City
    I was thinking of streaming it…. is that better or worse for blackouts?

    • Big City Mick


      The below-listed Club(s) is within the searched home television territory, and MLB.TV is subject to blackout for all regular season live games for these Club(s):

      Chicago White Sox
      St. Louis Cardinals
      Minnesota Twins
      Chicago Cubs
      Milwaukee Brewers
      Kansas City Royals

      Approximate Zip Code: 50301

      So, in short, you’re screwed.

  • http://bleachernation.com woody

    So basicly I pay for cable which provides me with 100+ channels of constant re-runs and bad reality programing and now I may possibly have to pay extra to watch baseball games that have been free for nearly all of my life. Isn’t it great to be a cubs fan. I see a correlation between the management and Samardzija. Samardzija wants to be paid like an ace while he piches like a mid level guy and the management wants a big market TV deal while they put out triple A talent and multiple 90+ loss teams. And I want to date beaautiful women, but I look like Lurch. This does seem like I am caught up in some bad reality show nightmare. Would somebody please wake me up!

    • Cubsin

      Just start your own reality TV show. Then you’ll be rich and famous, and the beautiful women won’t care that you look like Lurch.

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