WGN No More?

[Kid]

This is from the WGN America Wikipedia page, so I can't verify its accuracy, but still:

 

On October 7, 1999, WGN stopped carrying The WB's programming on its superstation feed at the network's request, on mutual grounds between Time Warner and Tribune that The WB had increased its national broadcast coverage (through affiliation agreements signed with local broadcast stations after its launch and the debut of a cable-only affiliate group in markets where no over-the-air affiliate was present in September of the previous year) to the point that discontinuing the network's carriage on the superstation feed was deemed necessary. Kids' WB programming on weekday mornings and afternoons and on Saturday mornings was replaced with syndicated series, while feature films replaced The WB's prime time programs, resulting in the superstation's schedule more so resembling an independent station than a general entertainment cable network due to the presence of local programming from WGN-TV.
 

The removal of WB programming from the superstation feed reduced The WB's potential household audience by 10 million homes, and was cited as the reason behind the network's ratings declines during the 1999–2000 television season (The WB fell to sixth place in the Nielsen ratings that season, behind UPN), as the network lost an estimated 19% of its household audience through the decision. For similar reasons to those that necessitated the decision to remove WB programming from the channel, WGN America also did not carry any programming from The CW when WGN-TV became its charter affiliate for the Chicago market at that network's launch in September 2006, due to the fact that The CW is widely available throughout the United States via over-the-air broadcast stations and affiliations with digital subchannels and local cable outlets (including through The CW Plus in smaller markets) when that network launched in September 2006.

[MrSheps]

I don't know anything about this stuff, so I am fully willing to be educated/proven wrong, but I believe the split in feeds happened something like 10-15 years before WGN dropped sports.  When WGN became a WB affiliate when the WB launched in like 1995, WB programming was shown on the superstation.  Years later (I'm thinking sometime in the late 90s or early 00s, but before WB and UPN merged to become the CW and WGN became a CW affiliate), they stopped showing WB programming on the superstation.  So unless there was something else to stop being the superstation, I don't know if the split in feeds does that.

Check out what I wrote above, I explained it pretty clearly, at least I thought. In short, it's two different events.  The first, the split from WGN into the a WGN Superstation (later WGN America) would have been about syndication issues in the late 80s/early 90s.  And yes, as I think I wrote, WB affiliation factored into that, but a couple years later after the initial split. That's all just history though, the important info here pertaining to the question about sports is that WGN America in the last few years reclassified itself as a basic cable channel and became retransmission consent.  See above, or I'm sure the wiki page you cited would cover it.

 

Edit: I just looked at the wiki page you mention, there's a whole section on the conversion halfway down titled "Conversion to basic cable".  In part:

With ownership and management changes occurring at the Tribune Company as it exited protracted Chapter 11 bankruptcy reorganization proceedings in December 2012 (which led to the August 2014 spin-off of its publishing division to focus on the company's broadcasting, digital media and real estate units^[30]), Tribune announced plans to convert WGN America from a superstation into a conventional cable network, similar to TBS's transition to a basic cable channel in the 1990s.

...

Plans called for WGN America to incorporate scripted original programming, to migrate from "limited basic" (or "lifeline") programming tiers (where it is carried alongside local broadcast stations and public, educational, and government access channels) to the "expanded basic" tiers of cable providers, and to adopt a retransmission consent model in future carriage agreements in which Tribune would receive revenue for the network's carriage (changing its existing model in which pay television providers carrying WGN America make royalty payments to the United States Copyright Office under compulsory license provisions for retransmitting out-of-market stations).^[31]^[32] Matt Cherniss was appointed as the first president and general manager of WGN America and Tribune Studios, a newly formed production unit that would produce some of the network's original content, on March 19, 2013.^[33]^[34]

 

Here's a second article about this, with less terminology:

 

Now that Tribune Co. is becoming a big, national broadcast company, airing Chicago sports is a bit small-time.

 

At least that's Tribune CEO Peter Liguori's thinking. He's in the process of converting the company's national broadcast channel, WGN America, from a superstation into a basic cable channel, which is mainly a technical transition, except that it will require dumping Cubs, Bulls, Blackhawks and White Sox game broadcasts. He doesn't mind, because that programming hasn't been paying off anyway, and besides — he's a New York Mets fan.

 

So if you're saying the 2 feed split split back at the end of the 80s/early 90s has nothing to do with dropping sports, that's correct (though the WB affiliation would have come a bit later), I just explained that part in my earlier post as I think it's interesting.  Dropping sports has to do with the conversion in the last few years from existing status to basic cable/ a retransmission consent model.  They're two separate events, if you follow. 

[Bricklayer]

I still contend that once the Trib could no longer steal profits away from the Cubs with their one big happy corporate family mentality, they turned away from live sports.  Having to pay market price for Cubs games was not in their interest.  

[MrSheps]

I still contend that once the Trib could no longer steal profits away from the Cubs with their one big happy corporate family mentality, they turned away from live sports.  Having to pay market price for Cubs games was not in their interest.  

Oh for sure, I don't think there's any doubt that once the Cubs were sold it changed things.  But I also don't think sports drew well for them outside of Chicago compared to costs, there's truth there too I'm sure.  These deals get complicated.  Part of WGN's strategy, I'm almost certain, is looking for wider carriage (to in theory increase ad profits), and by converting to a basic cable model they also now get paid for that carriage by reclassifying as restransmission consent. It's a better model by almost any standards than where they were, the problems come when you can't strike deals for carriage.  I think I saw that WGN America/trubune networks was recently picked up in the NYC DMA by a cable provider (big win, assuming they got a price they wanted) but if they don't strike a deal with Dish, for instance, that's a big loss.  

[rok]

chicagobusiness.com

October 7, 2016

Dealing with a Cubs home loss

Danny Ecker on Sports


After a 103-win season and TV ratings that have tripled in two years, the Chicago Cubs' plan to launch their own broadcasting network when the team reclaims control of its local TV rights in 2020 seems to be coming together.


The proposition remains a gamble: Breaking up the regional network partnership with the Bulls, Blackhawks and White Sox on Comcast SportsNet Chicago to form a standalone network could be a cash boon for the North Siders, given the eye-popping sums that media companies have paid for live sports rights in recent years. Yet obstacles remain, like distribution, finding enough content to air when games aren't being played and the sheer cost of launching a network.


The decision has more than the Cubs' financial future riding on it. The owners of the other three teams may now need to prepare to lose the partner with the largest fan base on the network. And depending on the nature of the sports TV landscape three years from now, a channel owned by those teams could be in direct competition for TV dollars with a Cubs network.


Under the current setup, the four teams and NBCUniversal hold equal stakes in CSN Chicago. It was a partnership that made sense when it was launched in 2004, with Sox and Bulls owner Jerry Reinsdorf taking the lead to structure the deal while the Cubs' Tribune Co. ownership had other revenue coming in from games on WGN-TV/Channel 9.


But since then, new products and viewing platforms have emerged to show live games that have made franchises' forming of their own networks more feasible. And with TV ratings that are nearly five times that of the Sox, the Cubs are unlikely to renew a deal unless they can get a bigger piece of the revenue from things like rights fees and advertising.


DISTRIBUTION MODEL


Reinsdorf and Blackhawks owner Rocky Wirtz, who decline to comment on the matter, will have to determine whether such a deal makes sense for them. If it doesn't, it will be up to fans, cable providers and any other distribution platforms to figure out what they're willing to pay for a Cubs network and a separate one for the Bulls, Blackhawks and Sox.


CSN Chicago charges distributors a monthly fee of $3.80 per subscriber to carry it (a cost that is passed along in your cable bill), the second most expensive network in most basic packages behind ESPN, according to media research firm SNL Kagan.


If distributors aren't willing to pay more than that to carry both the Cubs network and a three-team regional network starting in 2020, the market will determine which one gets a bigger piece of the pie. And with cable providers facing headwinds of cord-cutting and new players like Twitter entering the live sports distribution space, there is reason to believe they won't be willing to shell out substantially higher fees.


"There does come a price point for (regional sports networks) where cable companies and multiservice operators will choose one or the other and not both," says Marc Ganis, president of Chicago-based sports franchise consultancy SportsCorp.


In a similar case, Fox's Prime Ticket regional network in Los Angeles had its subscriber fee cut in half to $1.35, according to SNL Kagan, when it lost the Dodgers to a partnership with Time Warner on a single-team network.


The Dodgers got a financial windfall from the deal, but the fortune came at the expense of exposure, as many cable providers have balked at paying the nearly $5 the new network was charging to carry Dodgers games. As a result, more than half of the market can't watch them.


That's a cautionary tale for the Cubs about pricing for a new network. But it also indicates that a three-team Chicago regional network may have to charge a substantially lower subscriber fee than it does now.


Losing subscriber revenue would likely be offset by the fact that CSN Chicago would get off its books the $500,000 per game it reportedly pays the Cubs under its current deal.


BRINGING THE VIEWERS


But another challenge may be ensuring that losing one of its most popular TV products doesn't decimate advertising interest. Cubs viewership on the network this year was higher than that of the network's Sox and Bulls games combined.


Filling the live sports gap left by the team shouldn't be a problem. Despite losing the roughly 80 Cubs games it shows per year, CSN could actually have more live sports if the teams bring the 100 or so combined games they air on broadcast networks like WGN onto one network.


That could provide leverage with advertisers, who will no longer have broadcast options like WGN or WLS-TV/Channel 7 to use as bargaining chips to lower ad rates. The tough part could be delivering as wide an audience as it does now with the Cubs, whose appeal stretches far beyond Chicago into Iowa and Indiana where CSN Chicago is carried.


"I think CSN has some value, and a Cubs network has some value," says media buyer Paula Hambrick, whose Orland Park-based Hambrick & Associates has purchased airtime for clients during games on CSN Chicago this year. "Advertisers are willing to buy content wherever it makes sense so you could reach the target audience you need."


For now, sources close to all four teams and NBC Universal say discussions are ongoing about what their broadcasting ties will look like when their agreement expires at the end of 2019.


The picture will likely become clearer by the end of next year, as Cubs officials estimate they would need at least two years to set up a new network if they choose.

[rok]

With or without Cubs clinching Series, Ricketts family has $2B ballclub


Since buying the Chicago Cubs for $845 million in 2009, the billionaire Ricketts family has been painstakingly laying the groundwork for new sources of revenue to revitalize the team once known as lovable losers.


And now, as if on cue, the teams breakthrough into the World Series after a 71-year drought promises to pump up those revenues and boost the franchises value beyond the already stunning $2.2 billion that Forbes estimated this year. And that estimate, for those counting, does not include Wrigley Field and other assets tied to the 2009 purchase price.


Regardless of what happens in the World Series, experts say, the Ricketts family has won already.


The timing couldnt be better, said Marc Ganis, a sports industry consultant.


The familys to-do list some jobs done and some in the works is exhaustive: video boards and other electronic advertising signs, expanded bleachers, upgraded suites and premium seating, enhanced concessions and luxury clubs at the creaky, 102-year-old Wrigley Field.


But what is perhaps the most important decision has yet to be made.


With its agreements for local television rights expiring after the 2019 season, the Ricketts family is exploring the launch of its own regional sports network. That approach has been embraced in other major markets such as New York and Boston. Media rights most likely will become the biggest direct source of revenue for professional sports teams by 2018, according to a forecast by consulting firm PwC. A less risky alternative is to renew with Comcast SportsNet.


Either way, the World Series appearance will only help secure a more lucrative deal. And they are about to start marketing suites, club seats, advertising and sponsorships for the renovated ballpark, said Ganis, president of Sportscorp.


Experts also point out that, in the Cubs case, a World Series appearance builds on what is already an unusually broad and big spending fan base.


Normally, if a team just goes to the World Series, let alone wins the World Series, the next year you see a tremendous uptick in attendance, said Andrew Zimbalist, an economics professor at Smith College. In the case of the Cubs, they basically sell out one way or the other, so youre not going to get the same uptick.


The Cubs already have a great brand in a good market and they have a great building, one of the most iconic buildings in baseball, said sports consultant Sal Galatioto, who advised the Ricketts family on the purchase of the team. When you have a big base, (a World Series) moves the needle a little bit.


The Cubs rank as the fifth most valuable Major League Baseball team, according to a Forbes roster that is led by the New York Yankees and followed by the Los Angeles Dodgers, the Boston Red Sox and the San Francisco Giants.


While some observers think the Cubs could push into the No. 2 or No. 3 slot fairly quickly, others arent so sure.


Anything is possible, but the fact is there are a lot of very, very strong, very valuable sports franchises and one World Series doesnt really change that, right? Galatioto said. But they are going to be one of the most valuable franchises, no question about it.


The World Series didnt work a lot of magic for the Chicago White Sox, which lacks the cultish following of the Cubs. The South Side team has a middle-of-the-pack ranking among major league ball teams, with a value estimated at about half that of the Cubs.


The reality is, the White Sox are nowhere near as much of a glamour team as the Cubs are they dont have the same level of celebrity interest or fan interest, Ganis said. Their fans are wonderful and they are passionate, but there are far fewer of them.


Since the Cubs reached the World Series, the Ricketts family will have more pricing power on everything from tickets and ballpark advertising to sponsorships and media rights, experts say.


Its a business model that allows for a much larger economic engine, said John Rowady, chief executive of rEvolution, a Chicago sports marketing firm.


The Rickettses also have benefited from an overall increase in the value of professional baseball teams during the past few years, driven largely by lucrative new television deals.


The most stunning transaction came in 2014, when the Los Angeles Dodgers agreed to launch a regional network, SportsNet LA, with Time Warner Cable. The 25-year deal could bring the team $8.35 billion, though many cable providers have balked at paying a higher premium to carry the channel.


With that resistance, the Dodgers lofty terms could be hard to match now. With the rise of free or lower-cost entertainment on the internet, traditional cable providers are losing subscribers. The shrinkage has led cable carriers to balk at the high prices for programming sought by sports networks.


If every team had its druthers, being able to control their own content is probably the holy grail but then you also get into a different set of pitfalls, said sports sponsorship veteran Dany Berghoff, principal in the sport leadership practice of RSR Partners, an executive search firm.


Nonetheless, the Cubs continue to see potential in forming their own network, perhaps with a television partner like Comcast SportsNet Chicago, which currently airs 79 games and pays the Cubs about $500,000 a game. The other games are televised by several local television channels, or nationally.


The business is still good for everyone even though theres fraying at the edges as you see some of the (cable) cord-cutting going on, Crane Kenney, president of business operations for the Cubs, said last month. Since our rights dont come back to us until the 2020 season, we have a little bit of time to see which way the market goes. The Cubs and the Ricketts family declined interview requests.


However it plays out, it will build on the Rickettses winning bet in 2009. While MLB teams generally have seen a healthy run-up in valuations in recent years, the Cubs rise has been off the charts, something observers attribute to long-range, strategic thinking.


Outside the park, through a separate venture, the Ricketts family is building a sleek hotel with trendy restaurants, a plaza for game-day drinks, and an office and retail complex to be adorned with a huge video screen. The family also is buying up the rooftop clubs along the eastern and northern edges of the ballpark.


The teams entry into the World Series should polish the potential of the familys myriad investments, experts say.


A winning team equals mass interest from fans, said Rowady, the sports marketing executive, which equals more revenue.




2016 Chicago Tribune

[Butcher]

It sure is nice to finally have real ownership.

[Andy]

The Ricketts invested pretty significantly in the franchise.  I'm glad to see they're making their money back. 

[jstraw]

They get a network in place after 2019 and this franchise is worth three billion.

[Kid]

http://twitter.com/FOXSportsPR/status/79...7648646144

[jstraw]

I wish the TV deals expired sooner.

[Rappster]

If everyone at the parade bought a hat and t-shirt, we've now got enough money to scout and develop Martians...

[jstraw]

New minor league affiliate:

[jstraw]

[VanSlawAndCottoCheese]

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