Cubs, WGN-TV headed for breakup?

Chicago CubsThe Tribune Co. entered a new era on December 31, exiting bankruptcy after four years.

Now it appears the new regime may be without one of its flagship station’s biggest draws.

The Chicago Tribune reported on Sunday the Chicago Cubs may exit WGN-TV after the 2014 season, which could end a 66-year relationship with the Tribune-owned station.

It seems changes on both sides of the relationship are at play here – both are looking to grab more revenue, but in different ways: Under the ownership of Tom Ricketts, the Cubs are looking to earn more revenue by putting more games on cable, while Tribune is looking for ways to getting more retrans revenue by scaling back on expensive off-net sitcoms and airing more original, first-run fare that’ll attract a broader audience. In addition, Tribune is looking to recast WGN America (its cable superstation) from merely an outlet carrying Chicago newscasts and sports.

Market forces have brought changes in sports broadcasting in the last two years alone, as  teams are looking for sweetheart deals with regional sports networks (RSNs), or in some cases, starting their own – the latter the Cubs is seriously looking at, since doing so would open up additional revenue streams. RSNs not only generate advertising revenue – but also fees from cable and satellite providers (MSOs.)

Recently, the Los Angeles Dodgers struck a deal with Time Warner Cable to create their own RSN beginning in 2014, similar to a separate deal with the Los Angeles Lakers.  The New York Yankees created their own YES channel (which News Corp. recently invented 49 percent in), carrying Yankees and Brooklyn Nets NBA games, and the Phillies are looking at similar plan in Philadelphia.

While the Cubs are under contract to Comcast SportsNet until 2019, those type of deals hasn’t stopped other teams: the Toronto Maple Leafs created cable specialty channel Leafs TV under the ownership of Maple Leaf Sports & Entertainment, which carries a few games a month featuring the storied NHL franchise, with the rest split between Rogers SportsNet Ontario (an Canadian RSN), and national networks TSN and CBC (mostly Saturday night Hockey Night In Canada games.) Leafs TV is available only in the Maple Leafs “home territory”, which is most of Ontario (excluding the Ottawa market.)

These new deals are coming at a price – in the form of increased cable bills for you and me. RSNs typically seek anywhere from $2 to $4 dollars a customer – much more expensive than any general entertainment cable channel (ESPN typically seeks $5 per customer.) The expense is forcing many cable and satellite operators to start offering sports channels on separate tiers. In addition, Fox is looking to convert two of their specialty channels (Fuel and Speed) to Fox Sports 1 and 2, and is seeking greater distribution.

It seemed unthinkable the Cubs and WGN could part ways – both have been together since 1948, and been available nationally since 1978, when WGN-TV became a cable superstation. Tribune bought the Cubs in 1981, and raised the value of the team despite numerous losing seasons. The Cubs have long been WGN’s most popular draw, often outrating prime-time shows on the broadcast networks before they started airing original programming during the summer and the television marketplace fragmented.

In 1995 however, WGN became an affiliate of the new WB network, along with other Tribune stations as the group was seeking to attract more national advertisers in prime-time. WGN decreased carrying Cubs and White Sox games in the years since (at one point, pushing several Cubs games to sister all-news cable channel CLTV.) In 2000, Fox Sports Net Chicago struck a deal with the Cubs to carry around 80 or so games a year, while WGN carried the rest (Cubs games shifted to CSN in 2005 and took a 25 percent stake in the channel.)

A few years ago, WGN sold some Cubs, White Sox, and Bulls games to WCIU, to lessen prime-time conflicts with The CW, which came about as a merger between the WB and UPN networks in 2006. Ironically, The CW’s future is also up for discussion as the network’s low ratings have become a concern for Tribune, who owns fourteen of their affiliates.

After Sam Zell’s leveraged $8 billion buyout of Tribune, the Cubs were sold to the Ricketts family in 2009 for $845 million.

While a move would likely raise the ire of Cubs fans – especially those without cable or satellite – chalk it up to how business is done in this day and age, as nostalgia and tradition no longer matter in the media world.

 

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