Prediction of $6 Per Month for New Cubs RSN Has Serious Implications for Team and Fans

There was a bit of a commotion last month when the Chicago Sun-Times reported that the Cubs had reached an agreement with Sinclair on the formation of a new regional sports network, to be named Marquee. That report was quickly denied, but the right-leaning media giant is still expected to be the choice in the end. Perhaps best known in broader circles for essentially propagandizing its hundreds of local television affiliates, Sinclair has also been involved in the bidding for 22 Fox-owned RSNs spun off by Disney and has some experience in sports programming.

According to a prediction from John Ourand of Sports Business Journal, the resultant product will be very successful. Via a combination of cachet and blunt force, Sinclair and the Cubs will bend providers to their will to the tune of a $6 monthly fee per subscriber. Bear in mind that this all appears to be conjecture, though it’s hard to imagine Ourand is simply pulling numbers out of thin air.

Comcast is going to play hardball with the Cubs’ RSN, which is going to come to market with a price of at least $6 per subscriber per month. To gain leverage, the Cubs will not put any games on WGN or any other over-the-air station. And Sinclair will use the leverage it has from its national network of around 150 local broadcast stations to work out a deal. Comcast will hate it but the popularity of the Cubs, combined with the leverage from Sinclair, will force it to carry the channel when it launches in 2020.

For a really in-depth look at the various layers below the surface here, I will direct you to Brett Taylor’s post over at Bleacher Nation. He’s got all the different puzzle pieces laid out quite nicely and it really doesn’t make much sense for me to restate or regurgitate any of it here. To summarize, there’s a lot more to it than the simple picture Ourand paints here.

Chief among the important topics is that carriage fee, which is incredibly steep even for a product as desirable as the Cubs. And while that would be a big enough obstacle in and of itself, we’re talking about a channel that will be launching at the same time as the new venture between the White Sox, Bulls, Blackhawks, and CSN Chicago. Though such a partnership currently exists with the Cubs included, one has to assume the updated RSN will seek to increase revenues for its partners.

It’s entirely possible the fees for Marquee will actually be lower than those Ourand suggests, but it’s important to understand that even rates of $5 and under have led to serious snafus with providers, leaving millions of fans without access to their team. We saw that with SportsNet LA, which was unavailable to huge numbers of Dodgers faithful when it first launched. In a case like that, greater wealth comes at a very steep cost.

As for those hoping for some sort of over-the-top subscription service or a la carte purchase, you’re probably going to have to bide your time. Despite changes in how people consume their sports media, MLB’s blackout restrictions still apply. Those who reside outside the Cubs’ “local” broadcast area, or who are accessing via a masked/mirrored IP address, should still be able to access games via MLB.tv.

Rather than swim into deeper waters on the logistics of the new RSN, however, I want to get into the meat of what it means to the Cubs and their fans in both the immediate and distant future. Even though the Cubs are a very well-established brand, this new network will not be. In fact, it’s entirely possible the adoption of Marquee by fans will be neither seamless nor painless. If you disagree, consider how upset people were with the move away from WGN TV and radio.

Now factor in the additional cost and potential issues with availability, no to mention a new look and feel. And that’s assuming Marquee is available on the basic cable package. Put it on a higher tier and you’ve got a whole ‘nother can of worms. Long story short, this isn’t a turnkey solution by any means.

As such, it’s incumbent upon the Cubs to put a product on the field that justifies what could be the highest-priced RSN on the market. And that doesn’t mean starting in 2020 with the network’s launch, it means this coming season. Because it’s not going to look good for the team to talk about limiting payroll while eyeing a tsunami of TV revenue on the horizon, especially when reduced return on the RSN had been theorized as the primary reason for not spending more.

And who knows, maybe the new network enters the market at a low price and seeks to augment carriage fees with high advertising costs for its target market. But if the cost to end users is close to what Ourand is predicting, good luck squaring that against even the slightest whiff of frugality.

Am I saying the Cubs have to go out and get Bryce Harper if they’re indeed going to charge $6 per month for their new channel? Well, not exactly, though that’d be a good start. Even if it’s not a monster expenditure like Harper, the Cubs would need to make something happen to generate interest while also justifying the cost to consumers. It’s pretty simple.

Or, you know, they can move forward with the belief that fans will choke down the added cost regardless because their fandom compels them. There’s merit to that, no doubt, and ownership may not care as long as they’re getting those subscription fee from every cable subscriber in the greater Chicago area and millions more throughout the Midwest. Stay tuned, literally, because we should have firm details on this whole thing before long.

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15 Comments

  1. Well written Evan. “As such, it’s incumbent upon the Cubs to put a product on the field that justifies what could be the highest-priced RSN on the market. And that doesn’t mean starting in 2020 with the network’s launch, it means this coming season”. Most logical point so far with all this payroll constraint conjecture. Bryce is a must.

    Thinking now we do have payroll constraints because we have $30-40m budgeted for Harper.

  2. The Club currently has a bottom 5 system, a bunch of bad contacts and are coming off a terrible ending to 2018 season while as a whole the division is getting better.

    If they want the TV deal to work they better go get Harper. Theo let the Harper dream grow too big in fans heads and the FO is going to face major backlash if they cry poor at this point. He would have got more heat last year for not getting into the Stanton mix despite being on his 4 teams he would waive the NTC if people weren’t willing to wait for Harper.

    1. If you don’t subscribe to a cable provider that carries it, you won’t have to. But if you do subscribe, you won’t have a choice other than cancelling.

  3. The Joe Ricketts YouTube where he is addressing a group from Omaha, Nebraska explaining to them why they bought the Cubs. Telling the group his sonTom told him we could put anything on the field and they will always fill the park. Yes, the Ricketts family has spent a lot of money so far. And I don’t think they will stop spending, I hope. But I would never be so foolish to think that could not happen. Where they stop spending. Or that they have played a shell game with us fans to get us in. Remember, Prior to Don Grenesko Taking over as Tribune company President. The Tribune company wanted to build a brand new ballpark. On there then property around Rt 355 andThorndale Avenue. Until Grenesko put an end to that. Telling the Tribune Co that fans fill up Wrigley, we don’t need to spend money on a new stadium. They also filled the team with a lot of bad players, no need to spend on good players, when fans fill the park. I hope the Ricketts family is not keeping this in mind.

    1. Joe Ricketts is advising to keep spending close to the vest until the tv deal is firmed up. As patriarch to the family business, he will call the shots. I really beilieve their hsnds are tied til Joe gives the ok to proceed. Some folk elsewhere are telling me Joe isnt involved. Tom runs it til something out of the ordinary comes up. Joe as head of family doesnt want the tv deal screwed up and wants to maximize profits. So hes running the show for now. Minimal signings till further notice

      1. I remember all to well.PK.Wrigley also paid the price for saying that and running his team like he did. Empty stands. Between 3500, mostly, to 10,000 fans at games. Announced attendance higher than sold seats. I was their often.

  4. So let me get this straight, Sinclsir/Cubs charge the cable company to carry them (or any network, for that matter) and make $ off advertising on said network. That seems ass backwards, if they’re making money on one, they should pay for the other; as in, the networks PAY the cable company to carry them and make their $ on advertising.
    Then it be a fraction of the cost.
    Easy Peasy……:-(

    1. If you’ve got time, there’s a fascinating book called Those Guys Have All the Fun: Inside the World of ESPN, about the rise of the Four-Letter. It’s very exhaustive, to the point of being exhausting, but it details the way ESPN pioneered the use of carriage rights on basic cable packages as a massive revenue generator. That’s why you’ve heard so much about how they struggle with cord-cutters. I have DirecTV and while I don’t watch ESPN nearly as much as I once did, I’m still paying just as much for it. So is my neighbor who may not even know what channel it is.

      Channels are telling providers, “Hey, we know not everyone wants our content. But the ones who do want it so badly that you’ll lose them entirely if you don’t carry us. So let’s just charge everyone a relatively nominal fee that they probably won’t even notice, rather than charge just the interested parties $25/month.” As ESPN grew and became a legit mega-media outlet, carriers really had no choice, So they were insanely profitable because of carriage fees. Of course, then they bid the hell out of MNF and have gone through industry changes.

      1. It’s like Constaza double dipping. They charge companies for the right to carry them (which they have to jack up, to make their money) and also get all the advertising revenue. It makes no logical sense, as a provider or an end user.
        And I’ve said this previously, going forward the Chicago market is in a position to affect how we view sports, for years to come. If they and the leagues involved do not have the foresight to account for streaming, it will be a nightmare.

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