The Cubs Need Comcast to Carry Marquee, But There Are Probably Unique Challenges

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The Cubs Need Comcast to Carry Marquee, But There Are Probably Unique Challenges

Chicago Cubs

The 2020 Chicago Cubs Convention kicks off tomorrow, and, with a dearth of action on the big league roster, you can presume that business-y/operations/ballpark elements of the organization will be pushed a little more toward center stage. Well, plus David Ross, a new manager who has not become embroiled in a sign-stealing scandal!

On the business-y side of things, there’s no question that the impending launch of the Marquee Sports Network is the biggest story in the Cubs’ orbit. Not only is the creation of a new Cubs channel a powerfully impactful financial undertaking for the organization – ever-present in conversations about the team’s spending levels for the better part of a decade now – but it is also critical for a much simpler, much more immediate reason: watching games on TV and video is how most of a team’s fans experience most of a team’s games.

Sure, you want to generate revenue on the channel, itself, but – perhaps more critically – you want to create a good vehicle to stay connected to your fan base (and, dare I suggest, grow it?) for the next 10, 20, 30 years. Many fans will physically visit Wrigley Field for some games, and many others will listen to Pat Hughes and Ron Coomer on The Score. But the most consistent and largest, intimate connection is going to come from watching the games on Marquee.

… unless a huge chunk of the fan base can’t watch when the season kicks off.

That’s not a new or revelatory concern, of course, and it’s not even specific to the Cubs. Any time a new Regional Sports Network (“RSN”) has launched over the past 25 years, there are heated negotiations with the local cable and satellite providers to get the channel carried on an accessible tier for all subscribers at an appropriate price. Brinksmanship is commonplace, with networks and providers frequently using the various starts of preseason/training camp/Spring Training activities as a first checkpoint, and sometimes taking things right up to and into the season. It’s a dangerous lever there to be pulled, but with hundreds of millions of long-term dollars at stake, this is just the way the process plays out.

That is all to say, for most of this offseason, I’ve been fairly unconcerned that the Cubs and Marquee have yet to reach a carriage agreement with the largest cable provider in the Chicago area, Comcast Xfinity. At an estimated 1.5 million homes in the Chicago area – more than half the households – Comcast wields an enormous amount of relative power when it comes to the “success or failure” of the Marquee launch, so I kinda always thought they’d be the last provider to come to terms. Having seen enough of these things play out in other markets, to be honest, I’ve kind always expected the channel would launch (mid-February) before a deal was even in place. The actual regular season approaching, then, would perhaps be the line in the sand – with some pressure from Sinclair as a distribution partner – to get a deal done.

And that’s very much what might happen. It would probably be my current bet.

But, in the meantime, the negotiations are probably tense.

A challenge for the parties in the negotiation, of course, is that the Cubs have already secured deals with several other major providers in the region, including AT&T/DirecTV, which covers all of Chicago. You can fairly assume that, having signed on so early, DirecTV received a kind of “most favored nation” status – i.e., hey, we agree to sign on now, but if you wind up lowering your price tag later on to get another provider on board, you’ve got to give us that price, too. Thus, bending on price significantly for Comcast is not going to be super palatable for the Cubs, who do have the leverage of having covered all of Chicago. How practical that leverage is – “carry our channel or else you will lose subscribers to DirecTV” – remains to be seen.

Moreover, although Marquee is never going to publicly disclose the price tag it is seeking, when you synthesize the rumors out there, it’s looking like the monthly carriage fee is probably somewhere between $4 and $5 per month per subscriber, which is not out of line with what you would have expected (and apparently other providers already found it acceptable). Consider that back in 2016, the Dodgers were reportedly seeking $4.90 for their channel, which led to their infamous – and ongoing – dispute with DirecTV about carriage. RSNs in Detroit, Boston, and Philadelphia were in the $4.15-$4.25 range at the time, and may have increased since then. At the time, the Yankees’ YES Network was reportedly around or over $5.00 per user per month, but now is reportedly up to a whopping $6.74.

That is all to say, if the Cubs are around that $4.50 mark or so in the current environment – and if that’s what they’ve already secured from DirecTV, Mediacom, and Charter, then that actually sounds about right.

Which is not to say Comcast would be wrong to push back, trying to get a better price, knowing they cover so much of the Chicago market. That’s just business! But as we get closer to February, the situation does make me think back on a lot of my assumptions about the timing – that this is all just normal RSN jockeying – and wonder whether there are additional, unique layers to the negotiation that we haven’t previously explored. Layers we should probably have in the back of our minds as we track the negotiations, which will almost certainly spill over into the public in the coming weeks (that, too, is how these things go).

For example? The biggest potential other issue impacting negotiations in the Chicago area when it comes to carrying a new RSN? There is already an RSN in Chicago, carried on the major providers, who are charging their subscribers for the carriage fee. Even in a large market like Chicago, that’s a complicating factor in high-stakes carriage negotiations – a consumer’s bill will tolerate only so much inflation, particularly in an era marked by consistent cord-cutting. So any major provider is going to proceed with extra sensitivity in a market that will now feature two RSNs, which are among the more expensive channels.

That other RSN, of course, is NBC Sports Chicago, which previously carried a majority of the Cubs’ games, but their deal expired at the end of last season. Upon that expiration, the Ricketts Family exited their minority stake in the network, and opted to partner with Sinclair on the creation of Marquee.

The current iteration of NBC Sports Chicago is owned in parts by the Reinsdorf Family (White Sox, Bulls), the Wirtz Family (Blackhawks), and NBC Universal, which is itself owned by Comcast. That means, for Comcast, the issue is even more thorny than just the question of pricing two RSNs for your users – because, in part, they own one of those two RSNs.

I don’t know that Comcast’s stake in NBC Sports Chicago would be enough for them to flat out refuse to carry Marquee if the market otherwise demanded it, but I do wonder if it would be enough for them to be less flexible in approaching Marquee’s pricing request. To keep subscribers happy with their monthly bill in the end, Comcast might wind up having to accept a lower price tag for their own RSN in order to add Marquee … so it’s not too hard to see why the negotiations would be tense. (In fairness, though, with NBC Sports Chicago no longer having Cubs games, you’d think their price tag *should* go down in 2020, but that hasn’t yet been established publicly.)

Also, it’s not just about competing RSNs. There’s also a weird layer about competing baseball teams, which have always jockeyed for attention in the city. Imagine – and shudder about – a world where the only Chicago baseball you could see on Comcast Xfinity was White Sox baseball. I’m sure the White Sox wouldn’t hate having a little more of the baseball attention in the city, especially right now, given the exciting state of their team. But is that intracity battle for hearts and minds enough that it would actually impact carriage negotiations between Marquee and NBC Sports Chicago’s parent corporation? For a whole channel? I have no idea. I tend to think no, but, like I said, it makes the whole negotiating process a little more thorny than it might be in a more typical situation.

(Photo by Jonathan Daniel/Getty Images)

Of course, these kinds of complicated media relationships are not unprecedented in the world of RSN carriage negotiations, and sometimes they devolve to the point where courts have to get involved.

  • There was a famous fight in New York back in the early 2000s when Cablevision – which owned two other RSNs in New York – was negotiating with the Yankees’ new YES Network about carriage. It resulted in a lawsuit, where the Yankees argued the only reason Cablevision was pushing back against carrying YES Network was because of their own competing RSNs. In other words, the Yankees were arguing it was a violation of antitrust law for Cablevision *not* to carry their channel. The suit survived long enough for the sides to settle (after a year of lost games), but the one ruling in the case held that the Yankees were at least permitted to make that argument.
  • Interestingly, Comcast is involved in a somewhat similar lawsuit right now in Denver, having just this week filed a motion to dismiss an antitrust case involving Altitude Sports, the RSN for the Denver Nuggets and the Colorado Avalanche. Altitude is arguing that Comcast is refusing to carry their channel because it intends to create its own RSN in Denver and put Altitude out of business, but Comcast has responded that, among other things, they aren’t even a competitor of Altitude right now because they don’t operate an RSN in Denver. (Query whether that means the situation would be presented differently in Chicago?)
  • Comcast was once involved in a longstanding suit by the Tennis Channel, now owned by Marquee partner Sinclair, where Tennis Channel argued it was being unfairly discriminated against by Comcast when Comcast placed its own sports channels on a more basic tier of cable than Tennis Channel. Comcast ultimately prevailed in that suit, as Tennis Channel had failed to show discrimination up to legal standard in an antitrust case.

Fortunately, there hasn’t been any saber-rattling between Marquee and Comcast just yet, so hopefully the slow-moving, expensive, and uncertain world of the court system never comes into play in the negotiation.

The point here is not to sound any alarms about a carriage negotiation that I already would have bet you would take well into February to resolve. For now, you can continue to proceed optimistically (and if you’re an Xfinity subscriber in Chicago, you can check in with them periodically to see if they have an update for you). I think it’s very unlikely that you’re going to be faced with an Opening Day decision of changing your provider or missing Cubs regular season games.

Instead, the point is mostly just to tee up that this whole negotiation process is probably more complicated than we initially thought. It’s a unique and challenging situation, likely for reasons that go beyond simply the normal carriage disputes you see between major distributors and major providers.

Hopefully everyone involved long anticipated these potential complications, and have been thoughtfully and carefully proceeding to best serve their users/fans. I understand that these are huge businesses and there are significant long-term dollars at stake, but for me? As a Cubs fan? Mostly I just want to see a deal in place as soon as reasonably possible so that Marquee has a successful launch, and Cubs fans don’t have another reason to feel down about a team and a sport that is supposed to bring them joy.

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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.