It’s been a month since the Chicago Sports Network launched, and the Comcast blackout is starting to get real for increasingly frustrated fans.
The revamped Bulls are a promising 3-2, the last-place Blackhawks are 10 games into what may be a long season and Comcast’s one million Chicago-area subscribers are still in the dark, staring at a blank screen that used to be NBC Sports Chicago.
On the bright side, Comcast customers in the city and suburbs should begin to see an $8 credit for the programming void on their next bill, covering that portion of the regional sports fee paid in advance last month.
The regional sports fee for November, however, will remain intact, despite the ongoing carriage dispute.
“We are not adjusting the regional sports network fee at this time,” a Comcast spokesperson said Wednesday. “It is just a credit for the month of October.”
As the impasse drags on, there has been plenty of finger-pointing by both sides, blaming everything from CHSN’s foray into free TV to Comcast’s insistence that the new regional sports network move to a higher-priced subscription tier. Some have even theorized that Comcast is exacting revenge on the Bulls, Blackhawks and White Sox for ostensibly jilting NBC Sports Chicago, which was partially owned by the cable giant.
But sources close to the negotiations say the carriage fee dispute, not surprisingly, comes down to the fee itself: the amount Comcast is willing to pay CHSN to carry the 24/7 sports programming.
CHSN has made three offers to Comcast, the latest delivered just before the Bulls regular-season opener Oct. 23. It allowed for the network to move to the higher-priced Ultimate tier and included a substantially lower carriage fee than its predecessor, NBC Sports Chicago, generated from Comcast, according to CHSN.
Comcast rejected that offer earlier this week, according to CHSN.
A Comcast spokesperson declined to comment on “specific discussion points” in the negotiations.
Pressure is mounting on both sides, however, to come to an agreement before the time-honored Chicago sports mantra of “wait until next year” becomes a TV reality for both Bulls and Blackhawks fans. And for those keeping score at home, the White Sox opening day is five months away.
A joint venture between the Bulls, Blackhawks, White Sox and Nashville-based Standard Media, the Chicago Sports Network supplanted NBC Sports Chicago, the 20-year-old regional sports network whose broadcast rights expired in September.
CHSN struck deals with pay-TV providers DirecTV and Astound to carry the new network at its Oct. 1 launch. It also reached agreements with TV stations in Chicago, Rockford, South Bend and Indianapolis to broadcast the sports programming for free over the air.
Last week, CHSN added streaming service FuboTV to its distribution lineup, expanding its reach to pay-TV subscribers in the Chicago market, which is defined by Nielsen as 3.46 million homes from Lake County in Illinois to Indiana’s LaPorte County.
But Comcast, the largest pay-TV provider in Chicago, is playing hardball with CHSN, initially refusing to pay any carriage fee for the programming, citing its availability on free TV. The cable giant has since offered a “de minimis” fee, according to a CHSN spokesperson, but Comcast didn’t move at all in response to last week’s eleventh-hour offer before the Bulls opening game.
That leaves upward of one million Comcast subscribers unable to watch the new network as the Bulls and Blackhawks play on without them for the first time in decades.
Marc Ganis, a Chicago-based sports marketing consultant, said Comcast has all the leverage in negotiations with CHSN due to the declining value of RSNs amid cord-cutting, and the less-than-stellar performance of the three teams in recent years, with the White Sox coming off the losingest season in baseball history.
Fan pressure on Comcast, he said, is unlikely to be significant enough to get the job done.
“You don’t typically get a lot of fan pressure for the worst team in the history of the sport, and for two other teams that haven’t had very much success on the ice or on the court in recent years,” Ganis said. “If you had a Michael Jordan, the fans would be all over it. If you had Frank Thomas, they’d be all over it. But there is nothing like that.”
Distribution negotiations were more of a family affair when the teams’ TV home was NBC Sports Chicago, with Comcast owning 30% of the network at inception.
Founded in 2004 as Comcast SportsNet, a partnership between the cable giant and the Cubs, Sox, Blackhawks and Bulls, NBC Sports Chicago struggled in recent years amid cord cutting, low ratings and a major defection after the Cubs broke off to form the Marquee Sports Network in 2020.
When the partnership agreement expired, the remaining three teams pulled the plug and formed CHSN.
Marquee’s agreement with Comcast also expired Sept. 30 and the Cubs network is operating on short-term extensions. Sources familiar with the negotiations said Comcast is looking to move Marquee to the Ultimate tier as well, a premium channel package which costs an additional $20 per month — on top of the regional sports fee.
A Marquee spokesperson declined to comment on the specifics of the Comcast negotiations.
Sources say it was Comcast that walked away from the deal to continue NBC Sports Chicago. That may be part of a larger trend. During its third-quarter earnings call Thursday, Comcast said it is exploring a spinoff of its NBCUniversal cable networks segment, which includes Bravo, Syfy and E!, as cord-cutting continues to erode the legacy cable TV business.
Traditional pay TV — excluding online services such as Sling, Hulu and YouTube — has fallen to about 50 million subscribers, or about 38% of U.S. households, according to the latest data from eMarketer. That number is expected to drop to 40 million subscribers by 2026, or just 3 in 10 households.
In launching the new network, the Bulls, Blackhawks and White Sox essentially traded Comcast for Standard Media, a small TV station owner that engineered the over-the-air strategy employed by CHSN, and is leading distribution negotiations with the pay-TV providers.
Standard Media, which owns 15% of CHSN, is part of Standard General, the New York-based hedge fund that also controls Bally’s, including its Chicago flagship, a $1.7 billion casino complex slated to rise up at the site of the former Freedom Center printing plant in River West.
The company has also made a name for itself as part of an ill-fated regional sports network.
Last week, Diamond Sports Group jettisoned the Bally Sports name and rebranded as FanDuel Sports Network as its group of 16 RSNs prepares to emerge from Chapter 11 bankruptcy, pending a Nov. 14 confirmation hearing in a Texas court.
Carriage fees make up the bulk of the revenue for regional sports networks. Most of that is funded by cable subscribers — whether they watch regional sports networks or not. But as cord-cutting accelerates, pay-TV providers have cut back on the fees they are willing to pay for regional sports networks, long the cash cows of the cable bundle.
Comcast is charging $19.20 per month in the Chicago area for its regional sports network fee, which appears as a line item on the bill for the most popular cable subscription packages. The regional sports network fee included Marquee, NBC Sports Chicago and the Big Ten Network.
When NBC Sports Chicago went dark at the end of September, Comcast kept billing customers in advance for October as negotiations to replace it with the already-live CHSN continued.
While the $8 credit will appear on Chicago customer bills going out now, the regional sports fee will remain at $19.20 for November, pending a possible deal with CHSN.
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“I don’t understand how Comcast can charge customers a fee for something that they’re not delivering,” a CHSN spokesperson said. “Because they’re sure not paying us.”
Meanwhile, industry observers say Comcast will be keeping a close eye on how fast cord-cutting accelerates among its Chicago-area subscribers, as fed-up fans break the billing cycle completely and migrate to other platforms, including free TV.
In Chicago, CHSN is leasing two digital subchannels of WJYS-Ch. 62, a full-powered UHF TV station licensed to Hammond, which is broadcasting the sports network in high-definition to anyone that can capture the signal with a TV antenna.
About 15% of Chicago-area homes use an antenna to watch television, according to Nielsen. That number is likely climbing amid the carriage dispute, although reception issues and problems with older TVs needing a new receiver to get the picture have presented challenges for some would-be free TV converts.
The over-the-air offering has also proved to be a stumbling block in negotiations with Comcast, which initially balked at paying any carriage fees to CHSN for programming some viewers could get for free.
While options for CHSN may evolve down the road, including planned direct-to-consumer streaming, Ganis said the fledgling regional sports network may need Comcast more than the cable giant needs another RSN, at least circa 2024.
“I think the best thing they could do is do a short-term deal, just to stop the bleeding,” Ganis said. “Understand that you’re not going to get very much money out of it and then see how technology in the market develops.”
As for progress in negotiations, the old TV tag line applies: stay tuned.
rchannick@chicagotribune.com
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