I take issue with the one-sided nature of Bruce Levine's report. He did not challenge Tom Ricketts statements to season ticket holders.
Levine stated Ricketts' comment were notable because owners and players have key financial discussions looming as they negotiate a return-to-play framework for a 2020 season that has been suspended due to the coronavirus pandemic. Owners have proposed a plan that includes 50-50 revenue sharing, which the union has pushed back against, saying that it's a form of a salary cap.
Some players have expressed the belief that they should be compensated on a full pro-rated basis because they're the ones taking the health risk, as Rays ace Blake Snell said recently. Beyond that, another argument is that it's unfair for owners to "privatize the the gains and socialize the losses," as powerful agent Scott Boras said. The union hasn't officially commented on its stance.
Under the system of paying players fully pro-rated money, the losses would be too significant in the owners' eyes. MLB owners stand to lose an estimated $4 billion if no baseball is played in 2020, MLB commissioner said on CNN on Thursday.
"This has been a total shutdown of Major League Baseball," Ricketts said. "Unlike the NBA or NHL who had played 80 percent of their seasons, we have played zero. We have to look at how economics will affect the rest of the season. If we are looking at games with no fans, then we do have a real challenge. For the Cubs, about 70 percent of the (gross) revenues come in on the day of games. It comes in through selling tickets, concessions and the ballpark experience (such as parking and merchandise). The other 30 percent comes in through media -- whether it's on Marquee Sports Network, our local media partners and our share of the national media revenues.
"So ultimately, what we are looking at if we can get players into the ballparks is playing a partial season without fans. We are looking at 30 percent of our economics cut in half, so the fact is we must dig deep to find a financial model that works -- the players must feel fairly compensated and ownership doesn't continue to absorb the kind of losses we have so far this season. We are all working diligently toward that. At some point, there will be more discussions. You will hear a lot about it and read a lot about it. It must come down to finding a solution that works for everyone."
Ricketts emphasized players safety is the top priority for the league and owners.
"Every week, the owners have met to talk about how to get baseball back on the field," he said. "We have currently talked about getting back into our home ballparks for this season. That would be without fans. The league has worked very diligently to put into place the most extensive set of protocols, medical safeguards that are out there anywhere. We would be limiting access to the players, limiting access to the number of people in the park. With a strong testing regiment and various other protocols, we can create the safest working environment possible for our players if they are able to come back this summer. We do not have a 100% answer or all clear, but we think the league has created a safe working environment for players to come back to the ballparks. That is very good."
The news report only soft peddles an owner who is not telling a complete truth by trying to gain sympathy over his greedy players. Ricketts is snake oil selling his season ticket holders WHO ALREADY GAVE HIM THEIR MONEY. But Ricketts is hiding in his figures.
As I have reported since the Zell sale, Ricketts family has divided up various parts of "the old Cubs" into separate legal entities: the Cubs as a baseball franchise, Wrigley Field as a real estate owner, the parking lots as a different LLC, the triangle parcel as a separate corporation, and the hotel block as a separate entity. In other words, the Cubs have been stripped of any outside revenue generating properties.
The Cubs team is merely a TENANT at Wrigley Field. It does not share ANY of the revenue from parking, the plaza, or the real estate development income.
When Ricketts says that 70% of Cubs income comes directly from fans (when the league average is only 30%) it is a three card monte financial statement illusion. He is not counting the RENT the Cubs pay to the Ricketts, or all the Wrigleyville income/outside ball park concessions and alcohol sales. The Cubs were stripped down of any outside income sources so the money could flow directly into Ricketts bank accounts.
As for the other 30% income: Marquee Network (a bust), local radio (on a station friendly low revenue deal because Kenney screwed up local rights years ago), and the national TV contract share (which is less than other clubs because Chicago is a large market city). When he says half of the media money is gone, he is saying that Marquee has generated nothing compared to his old Comcast partnership.
Ricketts's turned the Cubs baseball operation, if it is 70 percent dependent on the gate for income, into a struggling, small market model.
Claiming the Cubs are in dire straights in the coronavirus panic is a FALSE NARRATIVE because Ricketts brought this financial house of cards down on himself. Three restaurants in his buildings have closed in less than 18 months of operation. His big $$$$$ Cubs network is a disaster. Even his local radio partner stopped replaying classic games (when the station has no live content!) He is not selling merchandise; he is not selling alcohol by the barge load; he is not a very good businessman.
He wants "a solution that works" for everybody, but he is really whining about his own potential crushing financial losses. The 50-50 revenue share works for a delusional Ricketts because no fans in the stands means at 70 percent pay cut for players. If the media income is down by half or more, that means another 15 percent pay cut for the players.
The outside the ball club revenue has to have taken a major hit as Chicago shut down bars and most of the restaurants. Without Cub games, there is no influx of tourists and fans to his Wrigleyville properties. Closed businesses are going to fall behind on rental payments or go out of business. The Ricketts created their own overdeveloped real estate bubble which burst when the season was suspended by the pandemic.
