The Chicago Cubs are located within the third-largest media market in the country, have a base of rabid fans supporting the team even in lean years, and — despite having closed the bleachers for much of the early part of the 2015 season — have received greater attendances at Wrigley Field since 2011, in part due to the team’s playoff run this year. While the team has started to have tremendous success on the field, they are moving forward slowly with payroll due to renovations around the ballpark, investments in rooftop bleachers, debt incurred by the Ricketts family when they bought the team, and a below-market television contract that runs out after four more seasons.
That the Cubs are interested in starting their own cable network in Chicago is not a secret. The team’s deal with Comcast runs out after 2019, and they have been setting the stage for an exit. The Chicago Cubs have a long history of airing games locally on WGN, which also found its way on to most cable packages around the country. The Tribune Company owned WGN as well as the Chicago Cubs, and the baseball team provided the company with relatively inexpensive programming that provided a big help to the bottom line.
The television industry, and in particular the sports television industry, have changed over time, rending the broadcast of games on WGN less beneficial. Regional sports networks began swooping up the rights to local baseball games, putting more and more games on cable. The regional sports networks gained much of their revenue from subscriber fees as opposed to traditional advertising, and cable providers felt these stations were necessary to give to subscribers as part of the basic cable bundle. This meant that the Tribune Comany airing games on WGN, while a cable channel to those outside of Chicago, was not maximizing revenue by putting games over the air in Chicago.
In 2004, Comcast Sportsnet Chicago (CSN Chicago) was formed. At the time the Tribune Company still owned the Cubs. CSN Chicago’s ownership was split between the local clubs. Right now, the split is 20% each to the owners of the Cubs, White Sox, Bulls, and Blackhawks, with the remaining 20% to NBC/Universal. Jerry Reinsdorf has the biggest share at 40%, as he owns both the Bulls and White Sox. The Cubs kept about half of their games on WGN, but opted out of that contract when it was up after the 2014 season. The Cubs negotiated their current contract with WGN and the local ABC affiliate so that they would expire after 2019, the same season as their deal with Comcast.
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