Does the AT&T-Time Warner Merger Create a New, Deep-Pocketed Bidder for the Cubs' TV Rights?

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Does the AT&T-Time Warner Merger Create a New, Deep-Pocketed Bidder for the Cubs’ TV Rights?

Chicago Cubs

With the massive AT&T-Time Warner merger gaining approval, the landscape for media delivery and content companies will shift yet again, the first step being the resumed merger plan between Disney and Fox (which rebuffed a last-minute offer from Comcast, the parent of NBC), which will include Fox’s regional sports networks going to Disney.

I’d been waiting to see what would shake loose from these merger storylines as they relate to the Cubs’ TV deal plans, given the obvious logic there, and also the fact that Cubs Business President Crane Kenney alluded to the organization wanting to see how those things played out as they consider partners. In other words, depending on how these mergers proceeded, the Cubs might have other potential bidders for their TV broadcast rights, which hit free agency after the 2019 season.

Currently, the majority of Cubs games are contracted to NBC Sports Chicago (formerly CSN Chicago), a regional sports network (RSN) partly owned by each of NBC, the Ricketts Family (Cubs), Jerry Reinsdorf (Bulls and White Sox), and Rocky Wirtz (Blackhawks). NBC Sports Chicago has expressed interest in retaining Cubs games on a new, long-term, traditional rights deal, but the Cubs have not been shy about expressing their preference for creating a new RSN of their own.

But if the Cubs were to go that route, it has always been a bit unclear with whom they would partner, especially after recent RSN deals in other markets have gone so poorly, thanks to the massive carriage fees those new channels were demanding from cable and satellite providers to justify the channel’s existence and to provide for the multi-billion deals they’d inked with the teams. There has been chatter of new streaming entities getting to the space – think Amazon, Facebook, etc. – but streaming rights are a tricky issue for individual teams, as MLB controls those rights, and prefers that individual clubs not go into the streaming business.

So where was the potential new partner – and, critically, bargaining leverage – going to come from?

Well, it turns out, the Cubs may have had a very good reason to be patiently awaiting a resolution of the AT&T-Time Warner merger, and it wasn’t just because of the Disney-ESPN-Fox-Comcast-NBC drama that was necessarily going to follow.

At the Sports Business Journal, John Ourand writes that the combined AT&T-Time Warner entity could be aggressive in pursuing new content deals on the sports side, and that could include a pursuit of the Cubs’ TV rights through the formation of a new RSN. To be sure, Ourand’s article reads hypothetically, but it is a very reasoned take – there’s little reason to doubt the Cubs and AT&T-Time Warner will soon speak, if they haven’t already been speaking.

However things play out, that could make for a better market for the Cubs’ rights one way or another. Getting this deal right – both in terms of revenue-creation and game-distribution – is the single most critical issue facing the Cubs. The organization’s revenues are obviously already up in this competitive window, given the way the Ricketts Family and the Cubs business side have savvily leveraged the team’s success and unique standing in Chicago to generate new revenue streams, and improve existing ones. Things are going to be pretty good for the Cubs no matter how this goes.

But a multi-billion-dollar TV deal could send revenues into another stratosphere, plausibly putting the Cubs on par with any organization in baseball when it comes to financial might, and the flexibility to take aggressive risks.

That would be lovely, so long as care is also taken to ensure that Cubs fans – wherever they may be located, and whatever their technological access – can see the games they want to see.

Author: Brett Taylor

Brett Taylor is the Editor and Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.