As the Cubs wind down towards a 100 loss season, there seems to be no rush on the baseball side of the organization to change their direction. The tortoise approach to stock the low minors with high value prospects and wait for their development for the next four years is what fans need to expect from the front office.
Fans can also expect that the Cubs big market payroll will be reduced to under $100 million, as the team will not go after any big money free agents during these rebuilding years.
The only rush the Cubs have at the moment is to try to get the State of Illinois and City of Chicago to kick in $150 million or more in taxpayer money to "rehab" Wrigley Field. Ricketts stumbled through an ill-timed and ill-prepared proposal last year, which was DOA in the state capitol. Since then, the Ricketts family has bought the McDonald's block across the street from Wrigley with plans to add that parcel to the annex and rehab plans to create and entertainment and commercial campus in the neighborhood.
The problem lies in the fact that the Cubs owners are spending tens of millions of dollars on real estate transactions for future growth, but are begging "poor" to government agencies to get a corporate welfare hand-out. The public has grown tired of expensive sports subsidies. Further making the case against such taxpayer funded projects for private business enterprises is that both the State and City are bankrupt, facing huge budget deficits and bond rating downgrades.
So why are the Cubs going to force the issue for public funds? Because it is a free money to the owners. All the consultants studies claiming that the Cubs bring in massive tourist dollars and city revenue must be taken with a grain of salt. The Cubs have maxxed out on ticket sales at 3 million at the turnstyle. There is no substantial revenue growth from the government handing the Ricketts family $150 million. Especially when the deal is a shell game; the city and state are on the hook to repay the bonds, but somehow the Cubs still want to take or divert a percentage of the amusement tax for their own portion of the reconstruction budget. The payment of tax dollars to a private company is repulsive: it is an annuity to the club and a stealth increase in ticket prices on the fans.
With the Cubs projected to spend $30 million less in each of the next 4 years in payroll alone, that equals $120 million in budget savings that the club could use for their own reconstruction of Wrigley. That payroll savings may be substantially more when their Class A prospects reach the majors at minimum salaries for three years.
Also hidden from the discussion is the new realization of baseball teams. The only reason the Dodgers took on $260 million in contract obligations from the Red Sox this season was that the Dodgers are in the midst of a multi-Billion new cable television contract. Baseball is going away from dependence on turnstyle ticket sales towards the big money returns of owning and operating their own team network.
The Cubs WGN contract expires in 2014. Its Comcast partnership ends in 2019. When the Tribune owned the Cubs, it created a weak, below market broadcasting deals that carry forwarded when the team was sold. The Cubs may have one of the worse TV deals in the majors. The Padres just re-did their broadcast contracts, and nearly doubled their revenue from the past deal. The Cubs new broadcast deal should surpass the Padres numbers, and could reach $100 million per year. And once the Comcast deal is over, the Cubs could create their own network with a hundreds of millions more in revenue, on par with the potential multi-billion dollar Dodger deal (at $400 million x 20 years).
In our opinion, the Ricketts are looking for the public to pay for their renovations before the big broadcast revenue streams hit the books in 2020. That is the bigger picture for the owners than player development.
