February 14, 2019

Cubs partnership could mark the start of Sinclair’s push into sports programming

By: Carter Wyckoff

By Ben Strauss

Washington Post

Feb 13, 2019


The Chicago Cubs announced Wednesday that they are partnering with Sinclair Broadcast Group to launch a new network that will exclusively broadcast the team’s games. The Marquee Sports Network is expected to be ready next spring, in time to televise the Cubs’ 2020 schedule.

The Cubs are the first Major League Baseball team since the Los Angeles Dodgers in 2014 to launch their own network. Sinclair owns nearly 200 stations across the country, plus the Tennis Channel; its partnership with the Cubs will create its first regional sports network.

Marquee will arrive at a time of upheaval for regional sports networks. Disney is selling 22 such networks, including the YES Network, which broadcasts New York Yankees games, and others in places such as St. Louis and Detroit that air local NBA, NHL and Major League Baseball games.

Bidding for the channels — RSNs as they are known — has reportedly been significantly lower than Disney’s asking price of around $20 billion. Rumored bidders have included private equity firms, Amazon, Major League Baseball — and Sinclair, too.

Sinclair CEO Chris Ripley said Wednesday that the Cubs partnership could be the first move of a bigger Sinclair push into sports.

“We are interested in those RSNs and we’re active in the process,” Ripley said in a phone interview. “These underlying sports rights have value outside the pay TV bundle. These are super premium rights for the Cubs, but also the RSNs in general. They bring in big audiences on any given night.”

Ripley said he did not believe the market was as soft as perceived, but that the circumstances of the sale were limiting a bidding war. Disney acquired the channels from 21st Century Fox in 2017 as part of a larger deal, but it has been required by the Department of Justice to sell them because of antitrust laws.

Ripley added that the most natural bidders for the channels each have a reason not to be involved. Fox just sold the channels, while Comcast and AT&T would invite their own antitrust scrutiny. Another potential buyer, Disney, is the seller.

“Sinclair is the next best strategic fit,” he said. “And if you only have one player, this is where you end up.”

The new network is a bet on the Cubs’ unique brand appeal and popularity, which the team’s owners, the Ricketts family, has sought to monetize since buying the team in 2009. In the past several years the Cubs have added video boards to Wrigley Field, commercialized the area around the stadium and secured public money to finance a new spring training facility in Mesa, Ariz.

Marquee’s arrival will mark the end of a broadcasting era for the Cubs. Since 1948, the Cubs have televised at least a portion of their schedule on WGN. During the 1980s and 1990s, the games were beamed across the country, helping give the Cubs a fan base that extended far beyond Chicago. In recent years, Cubs games have appeared on a Chicago RSN and the city’s ABC affiliate in addition to WGN.

The Dodgers launched their network in 2014 in partnership with Time Warner Cable in a deal worth $8.35 billion over 25 years. That financial windfall for the team has come at the expense of large swaths of local fans who cannot watch the team on Spectrum SportsNet LA because of local cable operators not paying to carry it.

“I think the Cubs’ network has a 50-50 chance of working,” said Phillip Swan, a longtime industry observer and the editor of tvanswerman.com. “How can you not look at the disaster of the SportsNet scene and not be a little skeptical?”

There are differences in the two deals, though. Sinclair, unlike Time Warner Cable (which has since been bought by Charter Communications), is not a cable operator but a programmer, and with its other channels it has leverage that will help in distribution negotiations. The high price of the Dodgers’ rights agreement also caused Time Warner to ask for high carriage fees from cable providers.

“We don’t have the same financial pressure as they did,” Ripley said. “Plus, Chicago really is a Cubs town. [The Dodgers’] fan base isn’t as strong or as concentrated.”

Ripley declined to disclose terms of the Cubs-Sinclair deal.

Industry experts predicted the Cubs would likely try to land a little more than $5 per Marquee subscriber. The YES Network charges more than $6 per subscriber, and ESPN charges closer to $8.

In recent years, Sinclair has faced criticism for conservative-leaning programming on news broadcasts on its local stations.

“This is a completely different division,” Ripley said. “Marquee Sports Network is a joint venture that we have with the Cubs. It’s a separate entity with its own employees.”