Cord-Cutting Cubs Fans Dealt Blow as Hulu Drops Marquee Sports Network, Several Other RSNs

Marquee Sports Network’s launch didn’t happen exactly according to plan, and that’s without even factoring in the truncated season. Missteps and delays with carriage arrangements and app authentication confused and frustrated Cubs fans who only wanted to be able to watch their team on TV or their mobile device. It wasn’t all bad, though.

A deal with Comcast’s Xfinity service was finally consummated just before the start of the season and a partnership with Hulu + Live gave Marquee a streaming-only service to satiated cord-cutters. Now, however, it appears as though that latter option is going away after Hulu and Sinclair Broadcast Group, the Cubs’ partner on Marquee, ended negotiations on a new deal.

“Starting on October 23, 2020 Hulu will no longer have the rights to distribute certain Regional Sports Networks (RSNs) that are currently included with your Hulu + Live TV plan,” read an email sent to subscribers Thursday morning. “[W]e were unable to reach an agreement with Sinclair Broadcast Group to continue offering channels like you Fox Sports RSN, YES Network, and Marquee Network…”

This announcement comes less than a month after rival streaming service YouTube TV announced it would be dropping the Sinclair-owned Fox RSNs as well. You may recall back in February and March that YouTube and Sinclair were at odds over carriage fees before eventually agreeing to carry the channels sans Marquee and YES Network. SportsNet LA, the Dodgers’ broadcast home, was also impacted.

The arrangement was only temporary and expired at the conclusion of the various sports’ regular seasons, all of which came around the same time this year.

“To bring you 85+ channels, we periodically renegotiate contracts with content owners,” YouTube TV tweeted on September 29. “In February, we announced we had negotiated an extension with Sinclair to continue providing FOX Regional Sports Networks (RSNs) through the end of MLB, NHL and NBA seasons.

“Now that the seasons are over, that extension is expiring. Starting October 1, 2020, FOX RSNs will no longer be available on YouTube TV. Members that are impacted will no longer have access to Library recordings from the FOX RSNs.”

Contentious negotiations and eliminating sports programming are nothing new to the broadcast landscape, as these things happen all the time. DISH Network got fed up with the rising cost of sports and walked away from that market entirely in July of last year in an effort to cut subscription fees and improve profitability. After an initial exodus, they’ve actually seen increases from those subscribers who don’t want or need sports.

At the same time, Sinclair has dealt with massive financial hemorrhages in their sports division as canceled or delayed seasons slashed both advertising and subscription revenues. When Sinclair purchased those 21 Fox RSNs from Disney for over $10 billion last year, adding them to a stable that already featured hundreds of local network affiliates, the idea was that they could bully service providers into carrying their products. But now the opposite may be true as those providers know they’ve got the upper hand.

Streaming companies in particular may be loath to work with Sinclair and other RSNs because the high cost of sports programming flies in the face of their value prop. The whole point of Hulu or YouTube TV is to be both cheaper and less clunky than traditional cable or satellite services. Once you start tacking on $5/month apiece for those sports channels, however, cheap goes right out the window.

Now, it should be noted that this is all coming during the offseason at a time when viewership of these respective channels is at its nadir. While I’m sure Marquee’s shoulder programming draws a few eyeballs, it’s the games that really matter. As such, it’s still entirely possible that negotiations will resume in the spring, especially if fans still can’t be in attendance.

But if they don’t, or if we’re seeing the next evolution of sports-channel carriage into a seasonal offering, this could be very bad news for the Cubs. Already faced with a reported revenue shortfall of $140 million this year and expecting $120 million in losses for 2021, the organization may have to significantly recalibrate the outlook of getting “much larger” revenue from its television deal.

Having a full season with Comcast and others in the fold will surely do a lot for advertising money, though missing out on 100 or so games this year surely set Marquee’s projections back quite a bit. Then you remove streaming partners at a time when more and more people are cutting the cord and you have to assume the forecast is getting even lower.

Not exactly a great sign when the team slashed 100-plus jobs on both the business and baseball operations sides and is expected to carry a lower player payroll next year as well.

Ed. note: As Comcast subscribers are starting to see, the monthly cost for Marquee will be $6.20/month. The carrier had opted not to increase rates during the season, but the upcharge will be in effect for subscribers moving forward whether they watch Marquee or not.

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