The 2014 season is drawing to a close, and we still don’t know what is to happen with the Chicago Cubs’ TV broadcast rights for half of their games next year. Indeed, even our most recent update on the situation is more akin to a “yeah, um, there’s no update, but ratings are good!” kind of update.
The Cubs opted out of their broadcast deal with WGN TV for the 2015 to 2019 period last year, but haven’t yet re-upped with WGN or found another broadcast partner. Efforts to find the best possible deal have undoubtedly been complicated by a number of factors. Among them: (1) only half the games are up for bid, (2) the Cubs don’t want to lock in any of those games past 2019 so that they can then offer the full slate to the market at that time, (3) until recently the Cubs’ games weren’t drawing huge ratings, (4) the Cubs are reportedly exclusive to CSN on cable, limiting their options for the WGN games, and (5) WGN America is moving away from local sports broadcasts and may not deem Cubs games to be a great investment given their direction.
On that last one, there’s something of a small update from the Hollywood Reporter. Speaking with Tribune Media CEO Peter Liguori, Hollywood Reporter discusses WGN America’s future cable plans, and indicated that Liguori “made no promises about continuing a 70-year relationship with the Chicago Cubs.” The article indicates that WGN’s current per-game price for Cubs games is about $250,000 (which we knew), and that the Cubs are seeking double that for WGN to keep the games from 2015 to 2019 (I don’t believe we knew exactly what the Cubs were asking, though I’d previously guessed $500,000 per game).
Over 70ish games, that increase of $250,000 would represent a revenue increase of $17.5 million. It’s not quite the game-changing increase the Cubs will see after 2019, but it’s significant.
In recent deals, the Phillies and Dodgers have received about $1 million and about $2 million per game, which is obviously a far cry from the relative bargain the Cubs are seeking for these WGN games, but you have to remember: it’s less than half the games (less valuable), and it’s only five years (less valuable).
It seems that the Cubs, right now, are having to balance whether to settle for a lesser increase from WGN (or another over-the-air broadcaster like Fox), or start their own network using multi-cast channels. The latter option not only risks that the Cubs will not see an increase in TV revenue for these next five years, it also risks that the Cubs could see losses tied to their TV broadcasts.
Of course, the upside is that if the Cubs draw huge ratings, they could do better by collecting their own advertising revenue. They’d also set themselves up to be experts in running their own network come 2019, when a major TV partner will enter the picture, and major dollars will follow.
Whichever direction the Cubs go, it seems like there will be a modest revenue increase. But the clock is ticking. As I’ve mentioned before, typically these deals are signed a year or more in advance.
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