Chicago Cubs to renegotiate TV rights with WGN


Tribune BroadcastingOfficials confirmed 2/18 that the team plans to begin renegotiating its broadcast rights agreement with WGN-TV, putting nearly half of its televised games in play after the 2014 season. The Cubs and WGN-TV have a broadcast partnership that dates back to 1948.

Cubs games are currently split between Comcast SportsNet Chicago and WGN-TV, earning the club about $60 million in annual broadcast rights fees combined, said a Chicago Tribune story. The CSN deal runs through 2019 and includes the White Sox, Bulls and Blackhawks as partners. Comcast owns about 30% of the network.

The Cubs get about $20 million to air 70 games each year on WGN. They’ve decided to exercise a renegotiation option with the Tribune-owned station, seeking to boost those revenues for the 2015 season and beyond. WGN will have a chance to retain those rights, but other media players are likely to get a shot as well.

“WGN has the ability to retain those rights through 2019, provided that they’re willing to pay fair market value,” Cubs spokesman Julian Green told the paper. “That’s a discussion for WGN and the Cubs to have together.”

Based on the $60 million revenue fee for combined broadcast rights, the Cubs get about $400,000 per game, far below the market value potentially set by the Dodgers. Under their reported new deal, the Dodgers will be getting about $280 million per year, or about $1.8 million per game.

“It doesn’t surprise me that the Cubs are going to look at all available options out there, including Comcast and everybody else who might be interested in their rights,” said Jim Corno, president of Comcast SportsNet Chicago. “Sports content is extremely valuable. It’s DVR-proof. Not many people are going to DVR a Dodgers game or a Bulls game or a White Sox game if they can watch it live. The advertiser can buy spots knowing that the chances are very slim that people are not going to watch my commercials because they’re going to fast-forward through them.”

The Ricketts family inherited the broadcast agreements as part of their 2009 purchase of the Cubs from Tribune, owner of the Chicago Tribune and WGN-TV. The $845 million deal — then the highest in Major League Baseball history — included Wrigley Field and a 25% stake in Comcast SportsNet Chicago.

Since then, valuations have soared, due in no small part to skyrocketing broadcast rights. Last March, an ownership group led by Chicago financier Mark Walter, CEO of Guggenheim Partners, paid a record $2.15 billion to buy the Dodgers out of bankruptcy. In January, the team announced the launch of its own regional sports network with Time Warner Cable beginning in 2014.

In a statement, Tribune signaled it was willing to consider competing to keep the Cubs on WGN: “WGN-TV has enjoyed a tremendous relationship with the Cubs and their fans since 1948,” Tribune spokesman Gary Weitman said in a statement. “It is a relationship that we are proud of, and one that brings Cubs baseball to fans throughout Chicago and across the country. We’re looking forward not only to the upcoming 2013 season, but also to working with the Cubs on baseball broadcasts in the future.”

Tribune airs games on both WGN-Ch. 9 and the national cable channel WGN America.

See The Chicago Tribune story here

RBR-TVBR observation: Baseball rights fees have been going up dramatically in recent years, mostly due to increased stakes from new, exclusive team cable channels. In January, for example, the LA Dodgers worked their own cable sports network via Time Warner Cable that will pay the team $7 billion to air its games over 25 years. The Cubs couldn’t create their own cable channel until 2020, noted The Tribune.