Cubs sale: the broadcast rights

One of the negotiating holdups between the Tribune and the Ricketts family was the sweetherat deal the Cubs have with WGN-tv and WGN-radio. (Deals that were both extended last fall.) Ed Sherman over at Chicago Business does a nice job today breaking down how the Cubs future ‘on the air’ will be handled by Tom Ricketts:

On the surface, nothing will change when the Tom Ricketts and his family buy the team. Court documents from the sale disclosed that the Cubs have deals with WGN television and radio through 2022.

Wow 2022. This means there is a real possibility that Ron Santo dies on the air.

That’s why I have to assume Mr. Ricketts’ lawyers threw in clauses that give the Cubs some flexibility to adapt to the changing landscape.

Seems like a big assumpption, but why not?

I would expect the free TV number to drop to 40-50 games in a couple years. The Cubs own 25% of Comcast SportsNet, and they also receive a rights fee from the network. Cable offers the multiple revenue stream of advertising and subscription fees. The games are more valuable there.

As for the Cubs launching their own cable network, I don’t see it happening for a while. Their deal with Comcast SportsNet runs through 2019, and I’m told it is a good one.

However, it is possible the Cubs could take some of those WGN games and reduce their telecasts on CSN and use that as a base to start their own channel with 50-60 games. You know that proposal is on the table.

Hmmm, I once thought this was the direction the Cubs would go. I’m not so sure now. If they have a good deal with CSN maybe they just keep moving games in that directions. They’ll be on CSN a minimum of 10 years. Still, the concept of creating a Cubs Network where the Cubs take in all of the revenue has to be appealing to Ricketts. We shall see.

As for the radio side, the long-term deal with WGN precludes the team from testing the open market. Radio insiders say Cubs radio rights could be worth in the $12-million range, nearly four times what the White Sox receive from WSCR-AM 670.

However, you have to figure WGN paid a premium to lock up the Cubs, considering what the team means to the station. Also, it is a good fit for the Cubs. WGN pulls in a large audience and the constant Cubs talk gives the team maximum exposure.

Still, I would assume the deal allows the Cubs to look into creating their own outlet either through the Internet or HD radio. Again, we don’t know what will be out there within the next 13 years.

I really wonder what ESPN-1000 would be willing to pay for the rights to broadcast the Cubs. I guess it will be a long long time before we find the answer to that.

Any audio (and video) rights on the internet are controlled by MLB, not the Chicago Cubs. The Cubs share that with all of the teams involved.