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Comcast Chicago Sports Sweep Slams Rainbow

Comcast’s deal with four Chicago sports teams to create a new network puts Rainbow Media-controlled Fox Sports Chicago out of the game. The incumbent regional sports net will lose rights to Cubs, White Sox, Blackhawks and Bulls games in October 2004, when Comcast’s newest SportsNet launches.

The deal is similar to one on Philadelphia, in which Comcast made local NBA and NHL teams equity partners in a new channel, sinking Rainbow’s SportsChannel Philadelphia. Comcast’s Chicago systems serve 1.5 million customers, about 80% of the DMA’s cable subscribers. The MSO expects to distribute the channel to a total of 3.5 million Midwest subscribers.

Cablevision’s Rainbow Media unit owns 60% of Fox Sports Chicago and plans to keep the network alive, seeking rights to college sports. But in anticipation of the Comcast deal, Bear Stearns Media analyst Ray Katz recently wrote the asset value of Fox Sports Chicago down from $266 million to zero.

Comcast can’t afford to treat Fox Sports Chicago too harshly. The company has approached Rainbow to buy out its interests in other regional sports operations outside the New York market. Comcast is also using Fox Sports’ national feeds for its other regional cable networks in Philadelphia and Washington.