Posted by chicagomedia.org on August 27, 2009 at 15:11:09:
Long-term deals with WGN still leave options for new Cubs owner
Posted by Ed Sherman
at 8/27/2009 2:17 AM CDT on Chicago Business
Since the Tribune Co. owned the Cubs, you knew the team's games would be telecast on WGN-AM Ch. 9 and heard on WGN-AM 720. It's been that way forever, right?
On the surface, nothing will change when the Tom Ricketts and his family buy the team. Court document from the sale disclosed that the Cubs have long-term deals with both WGN television and radio through 2022.
I have to admit I was surprised at the length of the contract. The Bears current deal with WBBM-AM 780 runs eight years.
Why tie yourself down to 2022 when the delivery systems (Internet, HD radio, etc.) seem to be changing by the moment? Who knows how we'll consume Cubs games in the 20s? Perhaps there will be a direct portal to our brain. Talk about blowing your mind after watching a debacle like Tuesday's 15-6 loss to Washington.
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.
From the television side, it is certain the Cubs will shift more games from WGN to Comcast SportsNet. This year, WGN will carry 70 games, with 8 of those games farmed out to WCIU-Ch. 26.
I would expect the free TV number to drop down to 40-50 games in a couple years. The Cubs own 25 percent of Comcast SportsNet, and they also receive a rights fee from the network. Cable offers them 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.
As for the radio side, their long-term deal with WGN precludes them from testing the open market for a long time. Radio insiders say the 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 price 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 believe Tom Ricketts is a smart man. Even though he has long-term deals with WGN, I'm sure he gave himself some flexibility to explore different options down the road.