NEWSLETTER
Chicago Cubs fans await the fate of WGN games after this season, with no announcement coming before the start of the season. Recall, the half of the Cubs’ games contracted to WGN are open to the market after this season, and are currently being negotiated with suitors. The other half of the Cubs’ games, which are contracted to CSN, are not open until after 2019, and cashing in on that lot sooner than later is probably the sticky wicket the Cubs are trying to now navigate.
In the meantime, the two most recent large market deals, the Dodgers and the Phillies, which are expected to be instructive for the valuation on the Cubs’ deal (that’s a very good thing), have run into some trouble when it comes to actually getting baseball games on the air (that’s a potentially bad thing). The latest turns in those sagas have DirecTV and Time Warner Cable (the partner in the Dodgers’ new regional sports network, SportsNet LA) very publicly fighting about the RSN’s very high carriage fees (the price all subscribers have to pay to get that RSN carried (yes, all subscribers, not just the folks who want the Dodgers’ RSN)), and a similar, but more complex, carriage dispute in Philadelphia with a handful of carriers.
In Los Angeles, barely 30% of households currently have any kind of access to SportsNet LA, and with DirecTV threatening to walk away from the negotiating table for the entire season, there’s a huge chunk of fans that might not get games at all this year (DirecTV has 30% of the market, according to the LA Times). These fights tend to resolve themselves eventually, but not before lots of public anger and posturing. This is not the kind of thing we want to look forward to after the Cubs sign their big money deal.
We’ve seen these kinds of issues coming from miles away, and, while they won’t necessarily inhibit the Cubs from landing a franchise-changing broadcast rights contract, I’m sure the issues are in the minds of the networks with whom the Cubs are negotiating. The Dodgers, the Phillies, the Astros, and the Padres have all run into difficulties getting their games in all of the households in a region after signing a big money TV deal.
The more resistant cable and satellite providers become to laying out huge carriage fees, the less attractive exclusive rights on a new RSN become for bidders. The idea in these carriage fights is for the fans to push the cable and satellite operators to carry the RSN at any cost – but, at some point, that cost is simply going to be too high. And then you’ll have carriers balking, and you might even have fans refusing to push.
The stories in Los Angeles and Philadelphia remain worth our attention, and maybe even moreso after the Cubs finally pin down what they’re going to do with their broadcast rights.
