According to Bruce Levine of 670 The Score, a new media deal between NBC Sports Chicago and three of Chicago’s five sports teams have worked out a deal that would create a new regional sports network launching in Oct. 2019. The White Sox, Blackhawks and Bulls will bundle their games together in what is expected to be a lucrative media deal for all parties. The Cubs will have their own network.
Breaking news -Sources tell me the White Sox – Bulls and Blackhawks will partner with NBC Sports Chicago on a new regional network starting in Oct of 2019 .An announcement of the agreement will come soon . The Cubs will have their own regional network with new broadcast partner.
— Bruce Levine (@MLBBruceLevine) December 18, 2018
Later Tuesday night, more details surfaced of a potential deal that is still being negotiated. According to sources who spoke to The Athletic in a Jon-Greenberg article, “their deal was expected to be done by the end of the month or just after the first of the year.” Greenberg also added that the would be one-third of the length of their current 15-year deal with NBC Sports Chicago sapping the overall value of the deal. Below are a few more details from Greenberg.
“Given that a source told us the shorter length of the deal…it wasn’t known if the teams will get any kind of upfront money for a new contract, though one industry sources said he would be surprised if they do, considering those teams have ratings issues. Furthermore, the RSN [Regional Sports Networks] business doesn’t look too rosy across the country, with Disney reportedly struggling to sell the Fox Sports Network stations it got in a deal with Fox.
“But the teams owned by Reinsdorf will get a larger chunk of revenues from the station, given that the Cubs won’t be a part of it and that the majority of their games will be on the station, rather than split up with over-the-air WGN. The games broadcast on Cable TV are much more profitable for the teams.”
Greenberg adds that given the alleged term of the deal, it behooves the White Sox to make a plea for both Manny Machado and Bryce Harper given the gravitational pull of their marketing personas.
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Netting Harper and Machado could be the key to unlocking long-term value in robust media deal.
Jerry Reinsdorf, the venerable owner of the White Sox and Bulls is poised to make a pretty penny on this transaction. Media contracts create the lions share of value to professional sports franchises. In fact, The Athletic‘s Ken Rosenthal speculated earlier in the fall that just such a deal could spell monumental offseason success for the Sox as they pursue free-agent stars Bryce Harper and Manny Machado.
Chicago has the third largest U.S. media market by size, trailing New York and Los Angeles. But the benchmark for this type of deal was set by the Philadelphia Phillies in 2014 with a $5-billion deal with Comcast. Half the deal was structured in a 25-year payment of $100 million dollars, a sum that began in 2018 and what makes the Phillies stout contenders for Machado and Harper as well. The other half of the deal was a 25 percent equity stake in Comcast.
If the Phillies set the floor for a lone franchise in the fourth largest market, the Sox, Hawks and Bulls are in for a serious payday. One fly in the ointment is that the Phillies have a greater franchise value than the Sox according to a Forbes report. The Phillies rank 10th among Major League Baseball’s most valuable franchises while the Sox rank 14th. Reinsdorf is a smart businessman and bundling his beloved White Sox with the Bulls and Blackhawks was a sly move.
The Bulls are the fourth most valuable NBA team and the Blackhawks fall in the same slot among NHL franchises. NHL clubs by nature are less valuable than the big-three sports leagues, but the collective value is set to hit a historic pitch.
But this announcement could have the most immediate impact on the White Sox. Just yesterday the Sox hosted one of two prized free agents in Machado, and they hope to corrale Harper as well. With a new deal in hand, the money and the marketing machine could swing the decision in their favor.
