The Cubs and the rooftop businesses are in the middle of a 20 year peace agreement in which the Cubs were given 17 percent of the rooftop revenue in exchange for the Cubs not putting up anything that would obstruct the rooftop views. Ricketts assumed this agreement when his family bought the Cubs from the Tribune.
The Cubs have been wanting to kill off the rooftop businesses because executives believe that the rooftops are taking away revenue that rightfully belongs to the team. The Cubs keep squawking to the media that the rooftop owners need to compromise so the team can start their $500 million rehab/real estate development projects. However, the rooftop owners don't have to do anything - - - they have a contract with the Cubs. It is the Cubs who unilateral want to change the terms. And besides, the real estate development projects, including capital improvements in the clubhouses, has nothing to do with added outfield signage. The Cubs are trying to get the city to push back at the rooftop owners. It probably will not work.
For the rooftop owners know the Cubs will not renew their agreement when it ends in 2023. So in order to recoup their investment, the rooftop businesses need to maintain the status quo. Any obstructions would dramatically kill their sales. And perhaps, that is the whole point of the Cubs pushing the new signage. It may be because fielding a bad team for three years has not driven away business from the rooftops. Or, perhaps, the Cubs plan to take away that business segment by building their own RF party deck has been a failure.
In a statement reacting to the news that the Cubs applied for a sign permit the rooftop owners released a statement saying that they will sue.
“Rooftop owners believe a blockage of our views violates the contract we have with the owners of the Cubs,” said Ryan McLaughlin, spokesman for the Wrigleyville Rooftops Association. “We have instructed our legal team to proceed accordingly.”
The statement adds only that the Cubs' move was “an unfortunate turn of events because our hope was to find a solution to this matter.”
The Cubs defense to any legal action to enforce the settlement contract appears weak. The Cubs are planning to say that the city approved the new signs, so the team should be able to do it. The team cites a paragraph in the agreement that states that an expansion of the ball park is not a breach. But all contracts have the concept of "good faith" and "fair dealing" incorporated into the performance of them. How an advertising sign could be considered an "expansion" but not a barrier is a tough sell. In addition, the city was not a party to the settlement agreement. Constitutionally, the city cannot take away any contract or property rights of the rooftop business owners without public condemnation and paying fair market value for those rights. However, there is no public purpose here since the Cubs are a private business and the signage in question serves no public purpose. The Cubs could also fall back to say so what we're in breach, we will go ahead and pay damages. But since the unique character of the contract, the rooftop owners could seek an injunction to prevent the new signage as damages could be inadequate if the default destroys their businesses. What is at stake is approximately $200 million in gross revenue left in the 10 years remaining on the deal. It is highly doubtful the Ricketts will write a check for $100 million plus to buy themselves out of the rooftop deal.
When the Ricketts bought the Cubs from the Tribune, they were aware of a few critical dates.
2014: when the Cubs could open the WGN TV and radio deal.
2020: when the Cubs exclusive cable deal expires.
2023: when the Cubs rooftop deal expires.
If these three revenue areas are key for the Ricketts rebuilding projects, as eluded to during the Cub convention, then it is possible that nothing could happen for another 10 years.
