Cubs Payroll Set to Soar with Potential TV Deal
Since 2004, the Chicago Cubs have belonged to a lucrative partnership with the White Sox, Blackhawks, Bulls, and some iteration of Comcast/NBC to broadcast games on NBC Sports Chicago, previously known as Comcast SportsNet Chicago. That partnership appears likely to end at the conclusion of next season, however, according to Bruce Levine at 670 The Score. While the current deal has been fruitful for the Cubs, the opportunity to own their regional sports network will give them a chance to multiply their television revenue several times over. Over the last few seasons, the Cubs have lingered just behind heavyweight clubs like the Dodgers, Red Sox, and Yankees in terms of payroll. A new television deal should put them on par with those teams for the foreseeable future.
The Cubs’ move to create their own network separate from their current partners has been in the works for several years now. The Chicago market has lagged behind cities like Los Angeles and New York in terms of the presence of RSNs. NBC Sports Chicago is still the only game in town, while LA and New York both have four networks broadcasting the major sports. Other big markets like the Bay Area and Boston also have multiple networks despite featuring the same number of — or even fewer — teams to broadcast.
When I last wrote about the Cubs’ option to start their own network three years ago, I noted the ominous cable bubble that has been pervasive for years but indicated the Cubs wouldn’t have a problem getting their channel carried by cable providers. It’s been three years, but the cable bubble refuses to burst. Even the Rays are getting billion-dollar local TV deals.
The market has changed in the last few years, as the number of cable subscribers continues to fall. Traditional cable providers have not only lost customers who no longer or never will pay for cable TV, but they are also facing increased competition from digital-only providers like DirecTV Now, Playstation Vue, Sling, and YouTubeTV. In 2017, cable companies lost 3.3 million subscribers, but digital providers gained 2.6 million, softening the blow dealt by those who no longer pay for television. In most cases, those digital providers are airing local RSNs and emphasizing to customers the opportunities available to watch sports without a traditional cable package. These models are new and it isn’t entirely clear how long they can last providing a skinnier, cheaper version of cable, but it has provided a lifeline to a model that, at one point, appeared to be on the way out.