Major League Baseball‘s Chicago Cubs are negotiating with Sinclair Broadcast Group to possibly take the regional sports network they co-own direct-to-consumer, according to the New York Post.
The negotiations come after the Cubs and Sinclair had difficult talks with Comcast to re-up its pay TV distribution license for the channel, Marquee Sports Network. Those negotiations ultimately resulted in the Cubs and Sinclair agreeing to cap licensing costs.
Through its Diamond Sports subsidiary, Sinclair owns — or co-owns — 19 RSNs. The company has recently signed agreements with the National Basketball Association and National Hockey League that include limited DTC streaming rights to local teams covered by those networks.
Fourteen of Sinclair's RSN's have contracts with local MLB clubs, but MLB Commissioner Rob Manfred has expressed reluctance to cast his league's DTC fortunes with Sinclair, given the nearly $10 billion in debt the company incurred while building its Diamond Sports empire.
Manfred wants a unified strategy for launching MLB clubs into DTC distribution. But a DTC deal from a marquee team like the Cubs might influence other MLB teams to go it alone with Sinclair.
TMT equity analysts including the celebrity-likes of Richard Greenfield have been highly skeptical of leveraged Sinclair's ability to pull off a DTC promise the company made to investors last summer.
Then again, the consensus was that it was unlikely that Sinclair could secure NBA and NHL rights, and that has already been accomplished. ■
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
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