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WGN in Danger of Losing Broadcast Rights to Cubs Games

wgn_304The Chicago Tribune reports the Chicago Cubs have given the Tribune Company, and in effect, CW affiliate WGN 30 days to agree to paying higher fees for the 2015 season and beyond or see broadcast rights for the team be opened up for other media outlets to bid on.

The big deal here?  The Tribune owned station has broadcast the Cubs since 1948. In 1981, Tribune bought the team from the Wrigley family before selling it to the Ricketts family in 2009.

“It would be a tremendous loss because WGN and the Cubs have been synonymous forever. In the embryonic days of television, we were there,” Jack Rosenberg, longtime sports editor for WGN told The Chicago Sun-Times. “We were with the Cubs in the beginning stages of radio much, much earlier. It’s been a tremendous partnership, a family deal of sorts. Let’s hope that there could be some meeting of the minds before this is all hashed out.’’

But the Tribune points out teams in other markets have discovered cable companies are willing to pay a lot of money to air baseball games:

In January, the Los Angeles Dodgers launched their own cable sports network, striking a deal with Time Warner Cable that will pay the team a reported $7 billion to broadcast its games over 25 years. Currently, Cubs games are split between Comcast SportsNet Chicago and WGN-TV, earning the club about $60 million in annual broadcast rights fees combined, according to sources. The CSN deal runs through 2019 and includes the White Sox, Bulls and Blackhawks as partners. Comcast owns about 30 percent of the network.

The Cubs get about $20 million to air 70 games each year on WGN.  While the deal ran through 2022, the option resets the agreement for a five-year term after the 2014 season. The clause included a different fee schedule for the 2015 to 2019 seasons at substantially higher rates, and also called for a fair market value appraisal to be conducted. The appraisal came in slightly below the increased fee schedule, and by the terms of the contract, the Cubs are entitled to the higher of the two rates, according to sources.

The Ricketts family renegotiated the broadcast agreements as part of their 2009 purchase of the Cubs from Tribune Co., owner of the Chicago Tribune and WGN-TV. The $845 million deal — then the highest in Major League Baseball history — included Wrigley Field and a 25 percent stake in Comcast SportsNet Chicago.

By exercising the option, the Cubs’ broadcast and cable rights will sync up in 2019, giving the team a target date and its full slate of games to potentially form a much more lucrative cable sports network.

TVSpy asked Tribune for comment. We will update when we hear back.

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