Launching a regional sports network is nothing new to White Sox and Bulls chairman Jerry Reinsdorf. In 1982-83, Sox, Bulls and Blackhawks games aired on SportsVision, a pay-TV service devised by business partner Eddie Einhorn. It required a converter box that unscrambled the signal through what was then WPWR-Channel 60.
It was so far ahead of its time that it failed, miserably. It didn’t gain nearly enough traction from fans who had been watching games free of charge for years on over-the-air TV. In late 1983, Cablevision bought SportsVision, moved it to cable and renamed it SportsChannel in 1989. SportsChannel begot Fox Sports Net, which begot Comcast SportsNet, which begot NBC Sports Chicago.
Now Reinsdorf is trying again, though this time he’s behind the times. He’s expected to take his teams and the Hawks to Stadium, the multiplatform sports network he controls after helping launch it in 2017. Reinsdorf enters an RSN market in upheaval because of the enormous cost of airing live sports and the continuing shift of viewership from cable to streaming.
How did we get here?
In 2004, Reinsdorf, Hawks owner Bill Wirtz and Cubs owner Tribune Co. came together to form CSN, giving each an equity stake in the network and a say in content, which they lacked at FSN. But Reinsdorf had another motive.
“At the time, Bud Selig was the commissioner of baseball, and Bud and Jerry were very close,” said sports business consultant Marc Ganis, the co-founder and CEO of Chicago-based Sportscorp Ltd. “Depending on the interpretation the commissioner’s office and the committee take on revenue sharing, it could have a dramatic impact on the amount of sharing the teams need to do from their broadcasting deal.
“Jerry was able to get the White Sox at the same level as the Cubs in that contract, even though the Cubs generated double, sometimes triple, the audience that the White Sox did, in part because he put the deal together and got the revenue-sharing ruling that he said he would deliver.”
The Cubs got sick of sharing and, when that contract expired in 2019 (two years after CSN rebranded to NBCSCH), they went on their own and launched Marquee Sports Network. The Sox, Bulls and Hawks stayed put and agreed to a five-year deal that expires in October.
But in the last few years, cord-cutting has skyrocketed, RSNs have struggled and Comcast has been slowly pulling back from regional sports. The company, which sold its Washington affiliate to Capitals and Wizards owner Ted Leonsis, would’ve been out by now had it been able to find a buyer. It still has channels in Boston and Philadelphia and two in Northern California.
“So what you see is Comcast reducing their exposure in the RSN industry,” Ganis said. “[RSN owner] Diamond [Sports Group] is in bankruptcy. YES Network is doing great. Marquee is doing well. But you’ve got a situation here in Chicago where all of the negatives have occurred as it relates to NBC Sports Chicago, and the contracts are up.”
What’s next?
Whenever the teams move, the hope would be that fans are unaffected. But they might not be so lucky. Marquee launched Feb. 22, 2020, and didn’t appear on Comcast until the delayed season opener July 24. Granted, no meaningful games were played in between because of the pandemic, but that didn’t stop other providers from carrying the channel then.
“It all depends on what carriage they get,” Ganis said. “The tier makes a very big difference because basic tier is 100%, but if you’re in a premium tier, it may be a fraction of that. I would be surprised if there weren’t efforts at negotiating a deal similar to what happened in Washington, where the team holding company bought the RSN, which then had the carriage contracts go along with it.”
There will have to be a streaming component, as well. Stadium already is in that space as a website, an app and a part of several streaming services, but its games and shows are free to watch. As an RSN, that would have to change. It also would need carriage on live-TV streamers such as DirecTV and Hulu. NBCSCH is well distributed online, so perhaps those contracts could move over, too.
There’s still a ton to sort out, including the content side. NBCSCH is a shell of what it was in previous iterations, when it aired live sportscasts several times a day. Outside of game coverage and shoulder programming, it basically has just “Football Night in Chicago.” Ratings and spreadsheets guided those decisions and put an emphasis on digital platforms to draw ears and eyeballs at off-peak hours.
Would Reinsdorf give Stadium the resources to devote itself to the Sox, Bulls and Hawks and attract fans at any time of the day? That might be a big ask in this sports-media economy. But despite the challenges he will face, Reinsdorf does have the opportunity to capitalize on a concept he and Einhorn pioneered over 40 years ago.