The TV stuff is necessarily really dense, and I hate digging right into the new bits without providing people context for why I’m doing it. So, forgive the duplication, but here’s a reminder on this stuff:
At the Cubs Convention, Cubs Business President Crane Kenney did not make a comprehensive announcement about the upcoming Regional Sports Network that the Cubs are expected to create with a distribution partner (rumored to be Sinclair). Rather, he said only that the expectation remains that the Cubs will start an RSN with a partner, that there could be other unspecified teams involved, and the Cubs may be ready to announce something in a month or so when certain other news came out.
Knowing that another round of bids on the old FOX RSNs were due at the end of January certainly made it easy to connect some dots, especially with two of the expected bidders – Sinclair and Major League Baseball – possibly intimately connected to the Cubs’ own RSN deal. It’s also possible that the Ricketts Family’s purchase of the final 5% of the Cubs that was still owned by the Tribune could have been the related news, but I’ve long thought there was a clear relationship between the Cubs’ deal and the FOX RSN sale, so I’m gonna stick to that particular gun.
Were you wont to speculate as to the reason for the connection between the two stories, you might say it has to do with the Cubs ascertaining more about the market rate for their product, or Sinclair wanting to make sure they can nab upwards of *HALF* of the MLB teams’ RSNs before committing to the Cubs at a certain price tag, or it could be that there is the potential for some kind of new type of RSN that combines multiple regions, or it could have to do with the resolution of in-market streaming rights which could well be tied to the FOX RSN sale (especially with MLB as a bidder) and the intrusion of national streaming services into this space.
Or it could be a mix of all of those things. Or it could be something entirely unanticipated by dudes at keyboards like me.
Whatever the connection, it remains deeply important to the financial future of the Cubs’ organization to follow the FOX RSN story closely.
To that end, we last checked in on the second round of FOX bids last week, and there’s already an update, and it’s a potentially very significant one: Sinclair might be out.
According to CNBC, Major League Baseball is still in the mix, as well as (new entrant) Liberty Media, which owns – among other things – the Braves and SiriusXM. Apollo, a private equity firm, is out. And Sinclair, the large owner of local broadcast networks and possible distribution partner in the Cubs’ new TV deal, is also out … with a caveat. CNBC adds that Sinclair, “may seek to join another bid.”
Hmm dot emoji.
Things get really crazy if you start going down an admittedly speculative road of connecting dots. For example, part of the reason Sinclair is attractive to the Cubs as a partner is their carriage clout – by controlling so many other broadcast stations, Sinclair could theoretically muscle cable and satellite systems in the Chicago area (and beyond) into carrying the new Cubs regional sports network. It’s not at all hard to imagine that would also make them a very attractive partner to another bidder for the FOX RSNs, if they aren’t going to buy them on their own. Just imagine a world where MLB and Sinclair together buy these FOX RSNs, which air games for like half of MLB.
There’s a whole lot of the country covered:
— Ken Fang (@fangsbites) February 6, 2019
The combined ability of MLB and Sinclair to leverage and protect carriage for those networks would be enormous (and if the Cubs wind up partnered with Sinclair, too, they could possibly go right into that bucket, too). And streaming rights? Which are controlled by MLB? Well, I’m just saying, it seems like the best path to getting a little more control of your “own” streaming rights would be to have a direct relationship with MLB on the distribution side.
My mind reels when I start thinking about a future where MLB and Sinclair together own a majority of the networks that broadcast MLB teams’ games, and how they could eventually totally disrupt the traditional cable model (at a time when that kind of disruption is probably going to be needed eventually, thanks to cord-cutting).
As I said, this does get a little crazy, and because we have SO LITTLE information on the outside (including how national streaming services like Amazon, which has been trying to get into this game, too), you should read all of this as just an opportunity to ponder.
That said, we’re now nearly a month out from Cubs Convention, this FOX RSN bidding is still ongoing, and we don’t yet have any updated information on the Cubs upcoming network. There simply has to be a relationship of some kind being impacted by these bids and negotiations. Honestly? I bet it’s complicated as hell.