More On The Coming Sports TV Rights Bubble

Courtesy WGN-TV

Will there still be money for the Cubs when their entire TV package comes up in 2019?

As you know, the WGN-TV portion of the Cubs' television package comes up for renewal at the end of this season. The team has already started talking about this package with potential suitors, as well as WGN -- they did so, in fact, last year. It's still uncertain whether the Cubs will re-up with WGN for five years, or go somewhere else.

What we do know is that portion of the TV package can't be bid out to a cable outlet other than CSN Chicago, as CSN has exclusive cable rights through 2019. The Cubs, I suppose, could go all-cable, but that risks angering the fanbase who don't have cable, as well as possibly not getting as much as they could through a WGN (or other over-the-air channel) package.

The bigger question, though, is what the Cubs could make from selling the entire 162-game package to one entity, or possibly starting their own network, after 2019. The team seems to be putting a lot of stock in the amount of money they'll get from such a deal -- as the Los Angeles Dodgers did by signing a 25-year, $7 billion deal with Time Warner Cable.

However! (There's always a however, isn't there?) The folks at Awful Announcing have a caveat for us regarding huge rights deals like that:

The Los Angeles Dodgers-centric SportsNet LA has launched in Southern California, but it has not been gaining traction with providers other than Time Warner Cable which owns the channel. SEC Network which will launch in August has picked up Dish Network, but is struggling to find other takers.

The whole issue is money and the cost per subscriber each network charges the providers. If you follow the business, you'll know that ESPN is the most expensive cable network charging providers over $5 per subscriber. Cable and satellite customers pay for the channel whether they watch or not. SportsNet LA's cost is in the range of $4-5 per subscriber which makes it one of the most expensive local sports channels in the country and it's only for the Dodgers. Time Warner Cable SportsNet LA which concentrates mostly on the Lakers is estimated at $3.95 per. 

That's really it in a nutshell. Five years from now, what would be the cost of a Cubs TV network for cable/satellite providers? For that matter, what will the cable/satellite marketplace even look like five years from now, especially with many people cutting the cable cord? The Awful Announcing article has one possible future:

Will it mean more channels go Over The Top as WWE Network has done or will the bubble burst? All this will play out over the next few years. Don't be surprised to see programmers bypass the middle man for new projects and go directly to the consumer.

The WWE Network method -- going directly to people who want it by online streaming -- could work, as long as there's a way of watching such video on big-screen TVs as well as via your computer or mobile device. Would it provide as much money to the Cubs as they hope? Will all of MLB's teams eventually distribute TV this way? (And if they do, they ought to end all blackouts.)

In any case, I suspect that in the end the Cubs will wind up re-upping with WGN-TV for the next five years, and I have heard that they will also be re-signing with WGN radio.

It'll be an interesting five years, not just on the field, but in broadcasting deals, too.

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