Now that the Cubs have finally finalized their partnership with Sinclair on the new Marquee Sports Network, it’s time to dive into exactly how fans will be affected. While it seems simple on the surface — it’s just a new channel, after all — the reality is anything but. I’ve been fascinated by the ins and outs of MLB broadcast rules since the Cubs first entered their current multi-faceted arrangement four years ago, so I’m hoping to share some of that with you here.
Ed. note: In case you prefer not to slog through all the minutiae, there’s a tl;dr at the end.
As a bit of background, this all got started when the Cubs’ initial agreement with WGN expired at the conclusion of the 2014 season. That’s also when WGN Superstation opted to pivot away from sports in favor of original programming like Outsiders and Salem. The station’s local arm, WGN-9, continued to carry games on a smaller scale, with ABC-7 picking some up as well.
NBC Sports Chicago, which was Comcast SportsNet Chicago at the time, became the Cubs’ flagship station and offered the team significant equity in the resultant revenues. The Cubs hold a large stake in the network through the end of this year, with NBCSC holding some and the White Sox, Blackhawks, and Bulls splitting the final slice.
While it’s of no concern for the purposes of this post, I’m curious how losing their anchor team will impact the other three organizations. Will they all see a revenue bump because their individual pieces of pie are larger, or will the pie be so much smaller in total that it won’t matter? Somebody get on that and report back to me.
Anyway, the motivation for the Cubs is clear: Both the financial pie and their slice of it become much larger with this new deal. While the specifics aren’t known at this point, Eric Fisher of Sports Business Daily says the Cubs are expected to see a significant increase over the roughly $70 million they will pull down in broadcast-rights fees this season. The team also receives “equity distributions” from their NBCSC partnership, though we can assume those will be eclipsed by the new Sinclair deal.
One thing we do know is Marquee is nothing like the $8.3 billion pact the Dodgers inked with Time Warner. This one feels like more of a slow burn in which both parties are adding initial capital to the mix. From there, we can probably assume a revenue share of subsequent carriage fees and advertising dollars. Now, how they go about achieving those increased revenues and why they partnered with Sinclair to do so is where we get into the impact on fans.
First, the why:
“From our view, the reason Sinclair was such a good partner had to do with their technical capacity,” Cubs president of business operations Crane Kenney told 670 The Score Thursday. “They’re a terrific programmer and operator and have really great strength on the distribution side.”
Kenney went on to say that the Cubs will have full control over programming, which may alleviate some concerns of Sinclair forcing must-read political statements or demanding a show in which Boris Epshteyn debates Theo Epstein. But the real key here is Sinclair’s clout in local broadcast markets, which comes from their ownership of 190 television stations. As much as the Cubs are a national brand, that’s not what’s most important for Marquee right now.
To understand what I mean by that, you must first understand how MLB restricts teams to specific territories in order to protect the interests of all 30 individual properties. If we’re being honest, though, it’s really about protecting the interests of teams in smaller markets that would otherwise see their product usurped by more popular teams.
Listen, I think that’s a dumb idea too, since they’d be better off just letting every team offer its own product to whomever’s willing to pay for it. But MLB has other ideas, some of which make less sense than a Wookiee living on Endor. That’s why a legal filing against MLB.tv was successful, a win for which I feel partially responsible.
Anyway, this is why the Cubs couldn’t simply launch their own venture and go with an over-the-top subscription service that anyone in the country could purchase at their leisure. MLB would never allow it. As such, it made more sense for them to find a partner that would handle all the logistical and administrative hassle of getting Marquee set up in as many markets as possible within their territory.
Kenney has gone on record as saying they’d like to do a better job of covering more of Iowa and Central Indiana, areas that have seen spotty coverage at best over the last few years. Syndication deals with several local stations have gotten the WGN-9 and ABC-7 games to areas outside Chicagoland, but not every cable provider has NBC Sports Chicago.
The Cubs have also committed to better availability through streaming services like Hulu, YouTube TV, etc as cord-cutting grows in popularity. That’s not always simple, though, as you go back to issues of territoriality and the fact that those services often boast a low, flat cost. That means some serious negotiations to make carriage fees work within the established subscription model, an obstacle that actually cuts across all carriers.
Many people were mistakenly excited by earlier speculation of a $6 carriage fee for Marquee, thinking it meant they’d be able to check a box and have their Cubs games for $72 annually. That’s a pretty small price to pay for getting 145 games, not to mention original Cubs-themed programming and replays of both recent and classic games, all in one place.
But as LL Cool J can tell you, there’s a big ol’ but to that cost estimate. First, we don’t even know if it’ll be accurate, as Kenney has declined to share specifics to this point. More than that, it’s not as simple as making that cost a one-off pass-through to those viewers who want the channel. Rather, that cost would be absorbed by all subscribers to that provider, thereby generating the most possible revenue.
And remember the pies we baked earlier? Do you think those other three Chicago teams might seek to increase their own carriage fees over what they’re currently getting? A provider may have to decide between the two offerings or whether carrying one or both to appease subscribers who want it/them is better than keeping monthly rates down by saying no to one or the other.
What you also have to realize is that providers don’t exist as paragons of altruism, simply aggregating different channels and providing access at wholesale cost. So that $6 or whatever they would be paying for Marquee is going to cost every single subscriber even more. That means someone paying, say, $80/month might see a 10 percent jump based on just one channel.
Long story short, the ability of those who reside within the boundaries defined by MLB as being local for the Cubs will be wholly impacted by Sinclair’s ability to secure arrangements with the various providers that serve those areas. If you are currently able to watch the Cubs on NBCSC through cable or DirecTV, you’d have to be with a provider that picks up Marquee as of the start of the 2020 season in order to keep getting your games.
Okay, but what about everyone who lives outside the blackout territory? The good news for all those folks is that there’ll be no change whatsoever. Since the rights for streaming or broadcasting through MLB.tv or Extra Innings are governed by MLB, the switch to Marquee will mean nothing other than a new name and different logo on Len Kasper’s polo shirt.
Despite all the unknowns that won’t be clear until agreements with providers are in place, the one thing we know for sure is that Chicago residents are getting hosed. Anyone who’s had free access to the terrestrial broadcasts on local channels will lose that ability, and we’re talking about something in the neighborhood of 40 games per season. The consolidation of games on Marquee means everything is behind a paywall.
Everyone still with me so far? Good, I promise I’ll try to wrap this up soon. But I was tweeting while writing and came across someone claiming they were “blacked out” of both national and regional broadcasts, which isn’t quite accurate. Being blacked out means you’re not able to watch a national broadcast when there’s a concurrent local broadcast, a screw-job that still occurs even when you don’t have access to the local channel in question.
For instance, there are times when both ESPN and ABC-7 will broadcast a Cubs game simultaneously. But if you reside in the Cubs’ territory, you would not be able to watch the former — not that you’d really want to if given a choice — because you theoretically have access to the latter. Therein lies the awfulness of the blackout restrictions, since very little of the Cubs’ territory would have access to ABC-7 without the syndication agreements.
Those same folks are left out in the cold even when the games are just on ABC-7 or WGN-9, since they don’t have access to either. That isn’t a blackout issue, it’s a matter of the Cubs dicking around with their broadcast agreements and having to patchwork stuff together for five years. Being blacked out means your access is being denied in that moment, while not having the channel(s) at all is just a lack of availability.
In theory, things will at least be simpler once Marquee goes live in February of 2020. Note I didn’t say they’d be better. We still don’t know how widespread adoption of the network will be or how much additional cost viewers will incur, only that the latter is a given to some extent. There’s also the matter of Ryan Dempster potentially having his own show on the network, which will extract a hefty psychological toll.
Then there’s the matter of offseason programming that is likely to include other sports of a non-premier variety. An ideal solution would see the Cubs finding a way to showcase Dominican Winter League games or those from various Asian leagues, but something with a lower-tier non-baseball team is likely to be in the mix instead.
I hope this has served to clear things up a little bit, though I know there will be more questions as this all moves forward. I’ve still got many of my own, most of which either can’t or won’t be answered for another year or so. And even after Chicago Cubs baseball is on the air with Marquee, there’ll be a feeling-out process in terms of the who, when, where, etc.
As always, I welcome you do drop any questions in the comments below and I’ll do my best to answer them.
Tl;dr: The Cubs’ new network starts up in February and will consolidate all the non-national games (145 or so) in one place. The team will have control of programming, so they’re saying there’ll be no political propaganda. If you currently watch Cubs games via cable or satellite, that same provider will need to pick up Marquee in order for you to watch the Cubs. If you currently watch via MLB.tv or Extra Innings subscription, you will see no change.
Blackout restrictions are dumb, but they’re not going away soon, which is why the Cubs partnered with a local TV-savvy outfit rather than trying to do their own thing and go over the top. The Cubs should see more revenue from this venture, though probably at a more steady pace and not in a huge influx of cash up front.
Also, blackouts are dumb.