Not yet a failure to launch
Here’s a little history lesson for Cubs fans, who already excel at anticipating worst-case scenarios:
In late 2015, the Yankees’ YES Network and Comcast got into a dispute over how much the ballclub wanted the cable company to pay to carry its games.
They didn’t come to terms on a new agreement until early 2017, meaning more than 900,000 Comcast households in northern New Jersey and parts of Connecticut and Pennsylvania missed a healthy chunk of the 2016 season.
Just something to think about roughly seven weeks from the Cubs’ first spring training game and the launch of Marquee Sports Network, the TV channel they’re launching with Sinclair Broadcast Group, which will have exclusive rights to all the games the team controls.
While Marquee currently has deals in place to run on a handful of carriers, including DirecTV, U-verse, AT&T TV, Charter Communications and Mediacom Communications, it is lost on no one that it’s still negotiating with many others, including Comcast’s Xfinity, the Chicago-area’s largest carrier with an estimated 1.5 million households.
The general assumption has been that Marquee will get its affairs in order by the time the regular season starts at the end of March. Only greed or ineptitude can stop it.
But what if Marquee drops the ball, lets it roll between its legs or just can’t close out?
In other words, what if the Cubs TV people do something Cub-ish?
Everyone tends to point to the Dodgers and SportsNet LA as a bright flashing beacon of caution.
While the 25-year, $8.3 billion TV deal has been supremely lucrative for the team, it has been a difficult proposition for fans. The channel heads into its seventh season this year still unavailable in a majority of Los Angeles-area homes because carriers consider it too expensive.
But the YES standoff also bears study, in part because it involves Comcast but also because what pushed Comcast to settle had nothing to do with sports or fans irate they couldn’t see the Yankees, Nets or New York City FC.
The channel had carried 130 baseball games in 2015, and Comcast was quick to point out, “Well over 90% of our 900,000-plus customers who receive YES Network didn’t watch the equivalent of even one-quarter of those games during the season, even while the Yankees were in the hunt for a playoff berth.”
The argument then, as it will be over Marquee, is that the regional sports network business model — frankly, the model for most cable networks — calls for customers to subsidize channels whether they watch them or not.
That, Comcast said, was unacceptable “given the network’s minimal viewership, which is why we have decided we can no longer justify continuing to carry (it). YES simply does not present an appropriate price-value proposition for our customers.”
Dropping the channel, predictably, did not go over well with the Yankees.
“It’s a typical gutless act by a cable carrier seeking to promote its own self-interest,” Randy Levine, the team’s president, told the New York Daily News. But that’s free enterprise for you. What ultimately drove Comcast to do a deal with YES in early 2017 was also in its self-interest.
At the time Fox had an equity stake in YES. Fox’s deal with Comcast for Fox News Channel was due to be renewed.
Comcast felt it could afford to hold its ground on CC Sabathia and Gary Sanchez but not Sean Hannity and Brit Hume and wound up agreeing rights deals cover Fox News Channel as well as YES and several other regional sports networks Fox owned.
Since then, Fox’s stake in YES and those sports channels has been acquired by none other than Sinclair, the Cubs’ partner in Marquee.
Sinclair used a similar tactic last year to ensure Marquee was picked up by AT&T’s DirecTV, U-verse and AT&T TV. It leveraged its 191 local stations in 89 markets across the country to secure carriage deals for the former Fox regional sports network, Tennis Channel and the soon-to-launch Marquee.
It didn’t hurt that AT&T was vulnerable and in no position to risk alienating customers.
It was coming off a quarter in which it lost 1.4 million TV subscribers, more than 5% of its total, and the company was under pressure from an activist investor who did not approve of how it was running its TV business.
Sources have said the DirecTV deal puts pressure on Comcast to pick up Marquee, although the AT&T services are in less than half as many Chicago-area households as Comcast’s Xfinity.
But it’s not yet clear whether that pressure is enough to push Comcast to sign on the dotted line sooner than later. The longer it waits after Marquee’s preseason launch next month, the more money it saves.
Not saying this is Comcast’s strategy, but holding off on agreeing to a deal right away also enables it to see just how much backlash there would be for holding out on Cubs games.
A baseball season without YES taught it the power of saying no.