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kid-watching-tvThe Chicago Cubs’ TV broadcast rights to a little less than half of their games, currently held by WGN, are set to expire after this season. Those rights are currently being negotiated with potential partners, and those negotiations are believed to include the possibility of such a partner picking up the full slate of games after 2019. The rights to those games are currently held by CSN Chicago, a network in which the Ricketts Family – the owner of the Cubs – has a 25% interest.

Against that backdrop, and in light of the TV-money-driven landscape-shifting in MLB, recent TV deals for other Major League teams, and the fallout thereafter, should be followed with considerable interest by Cubs fans. To that end, let’s check in on three recent deals and what’s going on with them right now …

  • The biggest of the big money deals – seriously: don’t expect the Cubs to even come close to the deal – went to the Los Angeles Dodgers more than a year ago, and the associated network is set to debut later this month. That $8.35 billion, 25-year behemoth will ensure that the Dodgers remain in the upper echelon of teams, financially, for a long, long time. But that doesn’t mean fans in Los Angeles will be better for it. To wit: Time Warner Cable, the entity with which the Dodgers paired on the monster deal, is having trouble coming to terms with various cable/satellite operators on carriage deals to actually get SportsNet LA into the majority of pay TV homes in LA.
  • The Los Angeles Times has the full story, including on-point thoughts about the burgeoning TV problem from Dan York, DirecTV’s chief content offers: “Time Warner Cable has unilaterally decided to pay an unprecedented high price, and now wants all of their own customers, as well as those of their competitors, none of which who had any say in the matter, to pick up that tab.” The problem for fans? Right now, Time Warner is not willing to sell SportsNet LA “a la carte” (i.e., fans that want it pay an extra fee to their service provider). So, unless your service provider pays the carriage fee (which is then passed on to ALL customers, whether they want SportsNet LA or not), you will not be able to see Dodgers games in LA. These carriage fights are ugly, and underscore a simple fact: huge money TV deals for baseball teams make sense only if cable/satellite customers are willing to see their monthly bill continue to rise.
  • The relevant RSN in Houston – shared by the Astros and Rockets – is currently demonstrating what can happen when too few of those carriage agreements are arranged: it’s in bankruptcy. The Astros are unhappy, the Rockets are unhappy, and the TV partner – Comcast – is unhappy, too. It’s quite a mess that will take some time to sort out. And, in the interim, the Astros could be losing out on revenue (because of the partial team ownership in the RSN), despite having already inked their big-money deal.
  • On a lighter note, at least the San Diego Padres will finally be on the air for most homes in San Diego, after Time Warner agreed to carry Fox Sports San Diego. The network was formed back in 2012, and has been the subject of many frustrated writings since then.
  • I suppose the upshot here is that, even after your team secures its big-time TV deal, there can be headaches and problems, especially if your team took equity in the RSN carrying the team’s games – something that seems pretty likely in any Cubs deal, given the upside to having an ownership stake. With ownership, suddenly the network’s carriage and viewership problems are your problems.
  • http://www.w2wn.net Cerambam

    Is there an reason to expect/hope for a split deal that brings .5 x mega deal dollars from company X for half of the games untill 2019 with contractual obligations for the other.5 x mega deal dollars for the other half of the games after 2019?

    If we were to get $5 billion valuation for all 162 games, i can see something like 1.5 untill 2019 and then $2-2.5 billion from 2019- 2034 or what/whenever. So we take a discount from our 5 billion dollar valuation to have more money for the next 5 years.

  • bnile1

    I suppose the upshot here is that, even after your team secures its big-time TV deal, there can be headaches and problems, especially if your team took equity in the RSN carrying the team’s games – something that seems pretty likely in any Cubs deal, given the upside to having an ownership stake. With ownership, suddenly the network’s carriage and viewership problems are your problems

    If I’m not mistaken, if the network goes well, the profits from the ownership share would go to the owner and not be subject to revenue sharing correct. In this scenario I think it would make the Cubs more likely to go with a heavy ownership stake yes??

    • hansman

      The problem is, even though the Dodgers are odds on favorites in the NL this year, their RSN might not have enough households to be profitable.

      I think it is safe to say no team is going to get that deal for a long while.

  • MightyBear

    What I don’t understand is that if I get Direct TV baseball package (which I do) and I get the mlb package (which I do), I can see any game I want except if the game I want to see goes against Fox Saturday Game of the week (and Sunday night baseball but that is usually the only game on). Now I may have to watch the other teams announcers when I watch the Cubs but I still see the game. How is that? Why can’t the folks in Houston and LA do that? Is that something that is happening and causing problems? These TV deals are very confusing.

    • YourResidentJag

      Well, did you know that the Fox Saturday game of the week will only be on FoxSports 1 now and I believe with regional coverage if I’m not mistaken. The only thing on local Fox is the All Star Game and the World Series. Plus TBS will only show games on Sunday for the 2nd half of season. To add to your confusion, of course. ;)

      And if I recall the TBS game doesn’t preempt any Directv programming.

      • MightyBear

        No the TBS game doesn’t do anything to the Direct TV or MLB package. In fact if the Cubs are on, it is shown on all three with different announcers.

  • Serious Cubs Fan

    I understand why Time-Warner bought the Dodgers TV-rights at such a premium? Yes they are big market but they greatly overpaid in my opinion. Especially if you look around the league big markets such as Philly are getting deals fro half as much.

  • Serious Cubs Fan

    I know we can’t predict the Cable market in 7 years but as long as the bubble does burst, I’m think 25yr deal worth $3.5-4 billion dollars? Crossing my fingers.

    • hansman

      The bubble has burst. The Dodgers deal was akin to the last house being flippedin 17 days for 147% profit in 2007.

  • AB in MT

    I feel more and more like these deals, especially for the Cubs will end up being irrelevant and that these “deals” reached between the teams and networks will turn into the equivalent of NFL contracts. Most of the deals appear to be with affiliates or single purposes entities. When they can’t get the sort of saturation/carriage fees they need, they’re going to all file for Chapter 11, just like Houston. At that point, all the deals will be renegotiated and or vacated, and market price isn’t going to look anything like what’s on paper here, even for LA.

  • Napercal

    With the fragmenting of the TV market across the board, I hope that Cubs are looking at innovative ways to deliver their product. With Netflix and Apple TV and God knows what Google has planned, it is foreseeable that TV as we know it will be obsolete in the near future.

  • Austin

    It would be sweet if the Cubs could get an all Cubs tv channel broadcasted nationally. Every cubs game on during the season minus the games moved to ESPN and all of those guys and when there isn’t cubs games on have either a talk show or maybe even minor league games. Then during the spring training the spring training games can be broadcasted. During the off-season it would be tough to fill the time slots everyday. This would be a dream scenario IMO at least.

    • Brocktoon

      That’s not currently allowed. You could broadcast the cubs network nationally, but every game would be blacked out.

      • Austin

        Yea unfortunately, the black out rules MLB has in place are just terrible. I think that’s one of the biggest reasons baseball has dropped so much. No one can watch their favorite teams anymore unless they go to the stadium.

        • Brocktoon

          That’s not entirely true. There are definitely some blackout restriction issues to clear up such as the Iowa stuff listed below, but unless your area is considers part of I teams territory you can get your teams games through EI or mlb.tv MLBs curent tv setup is what allows the local tv contracts to be so valuable

  • IA_Colin

    Has there been any movement with mlb.tv and not effing over the state of Iowa? As much as I love having 6-7 teams blacked out here, I would really love to actually see the majority of Cubs games online.

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