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Disney and Comcast don’t want Fox’s RSNs. What would this mean for a Cubs TV network?

The sale of Fox’s assets has taken an interesting turn.

Al Yellon

As you might have heard, the Fox empire is being broken up, with some of its parts, including Fox’s 22 regional sports networks, up for sale. It had been assumed that Disney and Comcast, the two leading bidders for these Fox assets, would want these RSNs as part of their expanding portfolios. Disney, owner of ESPN, could use the RSNs to beef up ESPN coverage, it was thought. Comcast, which already runs RSNs including NBC Sports Chicago, could have expanded its RSN empire.

But according to an article by Phil Rosenthal in the Tribune, this might no longer be the case:

Disney boss Bob Iger initially called the RSNs a “perfect complement” to ESPN. A few months later, however, Disney told investors that, if required by regulators, it would be willing to sell the Fox RSNs.

Comcast promised to match Disney’s promise to divest.

The reasons given for this change in the article should not surprise you:

Thanks to the passion local viewers have for the teams on the RSNs, these channels long were seen as indispensable to cable and satellite TV carriers. But the escalating cost of those teams’ rights has made the channels a less reliable bet than they used to be.

The appeal of passing costs on to consumers is diminished if not downright risky as cable subscribers weigh whether to cut the cord.

This has already happened, to some extent, in Los Angeles. As Rosenthal’s article notes, SportsNet LA, four years after its creation, is still not carried in about 70 percent of the market, depriving Dodgers fans of watching their games if they don’t have the channel on their cable or satellite system, and many L.A.-area systems don’t want to pay the costs to carry the channel.

So here, in a nutshell, is the problem for the Cubs as their TV deals all expire after 2019:

That’s the dilemma for the Cubs, who have been talking about establishing their own channel since the Ricketts family got the keys to Wrigley Field in 2009.

The Cubs have another season and a half until the contractual end of their commitment to partnering with the White Sox, Bulls and Blackhawks in NBC Sports Chicago. Then who knows?

Do they still go out on their own or try to negotiate more favorable terms with NBC Sports Chicago? Do they push an online channel of their own? Do they opt for some other type of media deal?

Those are all reasonable questions in a media landscape that seems to change almost day by day. Given the Cubs’ success, which seems likely to be sustained for several more seasons, a Cubs TV channel might well succeed, as long as they can create enough compelling non-game programming to keep viewers interested.

But the question remains: If a new channel is created, would there be enough money generated to make it worthwhile? Would local cable systems find themselves in the same spot the Los Angeles systems did, unwilling to pay the money a Cubs channel would want for carriage? Or would their best bet be to re-up with NBC Sports Chicago/Comcast, or make some kind of deal with Comcast to partner in their own channel?

There have, in recent years, been warnings that the so-called “cable bubble” was about to burst. With Disney and Comcast apparently not interested in keeping the Fox RSNs if they buy Fox’s other assets, it’s possible that bubble-bursting day might be closer than we think.