Conflicting and confusing information broke last night on the future of the Cubs’ broadcast rights and planned regional sports network. Given that this is perhaps the single most important story in the Cubs’ orbit right now, it’s only appropriate that it plays out like a big free agency story. MYSTERY NETWORK!
A reminder: what the Cubs ultimately do with their TV rights will serve as a disproportionately large chunk of the organization’s revenue for the next 15 to 30 years, so it’s impossible to overstate how important it is for them to get this right.
So, to reset what went down last night, after Bruce Levine reported that NBC Sports Chicago is indeed reforming next year without the Cubs, the Sun-Times reported that the Cubs would be partnering with Sinclair Broadcast Group on the team’s new network, which would be called “Marquee.” The part of the report that indicated the Cubs had already decided on Sinclair as their distribution partner for the new network was disputed by the Cubs, though sources told Levine they are a frontrunner:
Breaking news -The Chicago Cubs are denying they have a deal in place for a new regional network with Sinclair broadcasting . Industry sources say Sinclair is certainly a front runner to become a partner .
— Bruce Levine (@MLBBruceLevine) December 19, 2018
For those who follow media enterprises and/or politics, you may know that Sinclair, which is the largest owner of local broadcast stations in the country, has been the subject of controversy recently. The company issues “must-read” segments or talking points to its stations, a practice that came under particular scrutiny earlier this year when they required news networks on many of their local stations to present a warning about “fake news” on other networks. It has also been in the news locally because of its attempted purchase of Tribune Media, which, among many other things, would include WGN-9. The purchase came under antitrust scrutiny, and, after a protracted battle with the Department of Justice and the FCC, the acquisition was ultimately terminated in August of this year (and litigation about the contract continues).
Sinclair is also among the publicly-identified suitors for the 22 FOX RSNs (the ones Disney has to divest, and many of which are home to broadcast deals with MLB teams), a move that would make all the more sense if they were partnering with the Cubs on a new RSN in Chicago.
This all takes place against the backdrop of MLB working to get streaming rights deals in place AND trying itself to purchase the for-sale FOX RSNs (for which there are many other bidders, including Amazon), since it could take advantage of owning those RSNs and also controlling the streaming rights. Commissioner Manfred said as much in a recent Fox Business interview, and he certainly did not give any indication that MLB is going to relinquish its control of any stream rights to an individual club like the Cubs.
So, again, for the Cubs to get the most value out of their deal, they need MLB to make clear that they will allow the RSNs to offer in-market streaming to authenticated subscribers (or they need something crazy to happen like Sinclair or MLB (or some weird hybrid) buying up all the RSNs they can get, and then changing the nature of the streaming/cable dichotomy entirely). At least Manfred did emphasize that ensuring fans can watch games on whatever platform they prefer is a priority.
As you can see, this gets complicated very quickly, and that’s before we get into how the actual structure of the network and its operation – vis a vis Sinclair, the Cubs, and the Ricketts Family – would proceed. One thing to know, from a messaging perspective, is that a network partner would not have the right to inject its politics into the Cubs RSN:
Haven’t confirmed the Sinclair partnership but a few weeks ago, I was told it would be a distribution-only deal. The propaganda will come from @thekapman not Boris Epshteyn.
— jon greenberg (@jon_greenberg) December 19, 2018
In other words, if the Cubs wind up proceeding with Sinclair on a partnership, it would be more like partnering on the pipes, not the sewage.
Bruce Levine indicates that the plan is to have the new RSN up and running for Spring Training 2020, so things are really going to have to move quickly. From a financial perspective, I can’t help but connect the dots between the Cubs’ belt-tightening this offseason and the timing of MLB resuming its fight about in-market streaming rights. Hopefully, then, MLB is able to resolve that issue before – or in tandem with – whatever deal the Cubs put together. That way, the Cubs get some revenue certainty going forward (presumably a significant bump), and fans can have confidence that they’ll be able to stream games locally so long as they are authenticated subscribers to the network. (Out-of-market fans will continue being able to use MLB.tv or Extra Innings.)
Of course, this all comes before the new RSN tries to get carried on the various cable and satellite providers in Chicago, which comes with its own big-money battles. The fight in Los Angeles about the Dodgers’ RSN, for example, is still going on *almost five years* after its launch. Many local fans have flat-out not been able to watch the Dodgers without switching their TV provider. It’s a mess that hopefully the Cubs have studied very closely and know how to avoid.