On Thursday an interesting story came out of the Chicago Sun-Times that could shake up Chicago’s sports media landscape. According to Jeff Agrest, three Chicago teams could join forces to build a new television network.
The magic date is October 2024. That’s when NBC Sports Chicago’s contracts with the Blackhawks, Bulls and White Sox will expire. The fact that all three are due at the same time creates an opportunity for the three – two of whom are owned by the Reinsdorf family (which owns the Bulls and White Sox) – to follow the Cubs’ model and launch their own channel.
And, “according to industry insiders” according to Agrest’s report, the discussion is on the table. Or at least that’s what they want everyone in the industry to believe.
These three teams may legitimately want to create something completely new in Chicago…or they may want to pressure NBC (co-owners of NBC Sports Chicago) to improve the terms of their next deal. Or they might even want to exclude NBC from the picture, while keeping things largely the same. Just a few important points to keep in mind.
The story outlines the timeline for the Cubs to launch the Marquee Network with Sinclair Broadcasting, and it’s comparable to where we are now with NBCSN and those three teams. The Cubs announced plans to launch their own network in 2015, but it wasn’t until 2018 that the partnership with Sinclair and the Marquee name came to light.
Marquee Network went live in 2020. To say the timing wasn’t optimal is a massive understatement; the pandemic delayed the Cubs’ season, and Sinclair’s deal with Xfinity for the rights didn’t close until the 11th hour.
With the pandemic (hopefully) in the rearview mirror, now might be a better time for a deal to be struck with these three teams going out on their own. However, Marquee has added Chicago Sky games and Cubs minor league games to its menu of live offers.
Welcome to SportsVision?
If you’re of a certain age, you’ll remember the era (the 1980s, specifically) when SportsVision first came onto the scene. It did not work; maybe it was just 35 years too soon?
With the Reinsdorf family owning both the White Sox and the Bulls, they could go the route of the YES Network in New York, which covers the Yankees and Brooklyn Nets. But the idea that the Wirtz family, who nurtured the SportsVision ideal four decades ago, would stick with their United Center partners for a new network makes sense.
The future of streaming
According to Sun-Times report, Bally Sports is set to launch a streaming service for its RSN collection this year, starting in June with five MLB teams (Brewers, Marlins, Rays, Royals and Tigers). And NESN (Boston) already has a streaming platform for Red Sox and Bruins games (see: an NHL/MLB partnership).
If teams fully owned the network, the ability to be more agile and adapt to the ever-changing content media landscape would be more realistic. Offering a streaming service in addition to a cable network would give all teams involved the ability to create multiple new revenue opportunities through the different layers of customer/fan engagement.
A dying medium
As CNBC reported in November 2021, RSNs aren’t as attractive as they once were.
The local sports saga is unfolding in markets across the United States as cable and satellite television companies abandon regional sports networks, or RSN. Rather than accepting hefty monthly subscription fees, pay-TV providers like Comcast, DirecTV, and Dish, and digital providers like YouTube TV and Hulu, are increasingly moving away to cut costs.
They have decided that the amount they have to pay to keep the RSNs in the bundle no longer makes economic sense, given how few people watch them and how much they charge.
Other than ESPN, RSNs are the most expensive networks in the bundle. Many charge more than $5 a month per subscriber, according to research firm Kagan, a subdivision of S&P Global. Cable bills have to rise to bear the extra cost, leading to more cancellations.
This story also notes that 25 million customers have cut the cord with cable since 2012 and analysts expect another 12-25 million to follow in the next 3-4 years.
At the end of 2021, NBC Sports Network (the national network) ceased operations. NBC Universal made the decision to transfer its sports rights to other owned channels (such as the United States) to bring more attention to their sports content. Local NBC-owned RSNs were separate companies and did not fold at that time.
NBC has since lost its NHL rights to make deals with Turner and Disney; TNT and ESPN have had matches starting in the 2021-22 season.
Sinclair, who has partnered with the Cubs on Marquee, holds a significant interest in the RSN game. Disney was forced to sell 21 RSNs by the Justice Department when it acquired Fox’s entertainment assets for $71.3 billion in 2019 due to antitrust concerns. Sinclair reportedly paid $10.6 billion for the 21 networks in 2019.
Many of these former networks, which were branded Fox, were renamed Bally Sports Networks in March 2021. Regional Bally Sports Networks are operated by Diamond Sports Group, a joint venture of Sinclair Broadcast Group and entertainment studios with the rights to denomination sold to the casino operator Bally.
In May, Sinclair announced the closing of a new $635 million credit facility that will be used to develop Diamond Sports Group’s 19 Bally Sports-branded RSNs.