Predicting the Cubs’ future in any aspect is a guessing game
Loss of revenue, cuts to employees’ pay, so much up in the air
During a wide-ranging interview with the four Ricketts siblings when the family was purchasing the Cubs in 2009,
Todd Ricketts interrupted the questioning to make a simple point about their main goal.
“We’ve kind of touched on all these topics of debts and revenues and ticket prices and night games,” he said. “But when you add up all those things, I mean, we all come from business backgrounds. Those things will be dealt with seriously, and we’ll look at it and come up with the best answers we can.
“But the reality of it is this is about having fun, and if we’re not having fun then we’re doing something wrong. And that’s really the attitude I want to take to the fans and to the players, and to everybody that works here — that, at the end of the day, it’s fun.”
There’s no doubt the Ricketts have had plenty of fun over the last decade, ending the team’s century-plus championship drought, bringing Wrigley Field into the videoboard era and remaking Wrigleyville into a River North clone in swift fashion.
They bought the Cubs during a global financial meltdown, getting the club, Wrigley Field and a 25% stake in Comcast Sports Net (now known as NBC Sports
Chicago) for a steal at $845 million. The team alone is now worth an estimated $3.2 billion, according to Forbes.
Some siblings have gone on to bigger things. Pete Ricketts is the governor of Nebraska and Todd is working to raise money for President Donald Trump’s re-election campaign.
But now the world is in the midst of the coronavirus pandemic, and the Cubs owners find themselves in a most untenable position.
The baseball season is entering the third month of a shutdown, which coincided with the debut of their long-awaited TV channel, Marquee Sports Network. The Hotel Zachary, a few restaurants and another building built by their real estate arm, Hickory Street Capital, are either empty or only in partial use because of the state’s shutdown order.
Gallagher Way, their profitable gathering spot next to Wrigley, is closed, as are the 11 rooftop clubs the Cubs bought to gain a stranglehold on the rooftop business.
Like many other businesses, all their best-laid plans have been waylaid by the COVID-19 outbreak, and now the future of baseball may be in the hands of a small group of influential people, including a few prominent owners, agent Scott Boras and the Major League Baseball Players Association, which currently is negotiating with MLB on a restart proposal.
Hope springs eternal, but if they can’t come to an agreement on health, safety and financial matters, you can kiss the season goodbye.
Welcome to the new world. Are we still having fun?
Depending who you ask, the Cubs are likely to lose a ton of money even if the season begins in empty ballparks in July, as MLB has proposed. The only question seems to be whether they’re screwed or totally screwed.
The Associated Press, citing an MLB document on the financial ramifications of paying pro-rated player salaries during an 82-game season in empty ballparks, reported the Cubs potential losses could be $199 million, fourth worst after the Yankees ($312 million), Dodgers ($232 million) and Mets ($214 million). The players union may dispute the numbers, and except for the publicly-held Braves, teams’ financials can only be estimated.
The Cubs declined to comment on the AP report, but one source said the club would be better off financially, at least in the short term, if the season was canceled than if their players received pro-rated salaries combining for more than $100 million — or about half of the 2020 payroll.
Of course, if the season was canceled, how many fans do they think would feel good about putting a down payment in September on 2021 season tickets? Again, no comment.
No one should feel sorry for the Ricketts family, or any of the other owners who are in the same predicament for reasons no one could foresee at the end of 2019, when MLB made a reported $10 billion in revenue. Many of them are billionaires, so they’re not going to be showing up at the local food pantry looking for dried fruit and canned goods.
Apologies to fans pining for baseball, but the real victims are the lower-paid team employees whose teams are furloughing them or cutting salaries, as the Cubs have done, to stem losses. Theo Epstein, president of baseball operations, and Crane Kenney, business operations president, reportedly received the highest paycuts, about 35% according to a team source. But rest assured, they’ll get by.
The players also will survive, even the lowest paid ones, unless they’ve splurged on luxury cars or a second house with their perceived future earnings.
Around the league, some believe the Cubs’ owners face a more dire forecast than most of their peers because of their investments in Wrigleyville, the Marquee Sports Network and the rooftops. (Though if the state reopens before the season begins and Mayor Lori Lightfoot allows it, the rooftops may be the only place in North America to watch a live sporting event in person).
That speculation simply could be a case of rivals wishing schadenfreude on the Cubs, who aren’t exactly beloved by other owners and front offices. But even before the shutdown, the Cubs were facing two significant financial matters — getting Javier Baez and/or Kris Bryant signed to a long-term contract and getting a deal with Comcast to provide Marquee Sports Network to its many customers in the Chicago area.
Kenney recently told season ticket holders they were close to a deal with Comcast before the shutdown began, so that problem should be fixable.
But how much money can the Cubs afford to pay Baez and Bryant in the new baseball norm will be up in the air if no one can predict how ballparks will be able to provide fans with a safe environment in 2021 and beyond. The Cubs say 70% of their revenue stems from ticket sales, concessions, parking, in-house corporate partnerships and the like, which is much bigger than MLB’s reported average of about 40% in those areas for all 30 teams.
Kenney’s metaphor — the “wheelbarrow full of cash” he drops at Epstein’s office to spend on payroll — could be half full, or less, if fans fear returning to a packed ballpark without a coronavirus vaccine, or if they simply can no longer afford to go to games because of the economic downturn. If they can’t project 2021 revenues, would Epstein be forced to sell off players such as Bryant, Baez, Willson Contreras and Jon Lester in the near future?
In mid-January, before the coronavirus was on anyone’s mind in Chicago, I asked Laura Ricketts about the payroll issues that led to a largely silent offseason and how the team would look with so many core players entering free agency in the next couple years.
“Baseball is so cyclical,” she said. “Everybody knows how baseball works, it’s ups and downs, and there are cycles and various periods of having certain players at certain times in their career. We also have to do all of that and put a team together in the environment we’re in, and with the talent available.
“I’m not going to pretend that I know all about what Theo and the guys do in baseball ops, but you have to deal with what you’re dealt to a large degree in terms of what the environment and landscape is like. I think they’re doing what they can.
“We obviously still have a lot of faith in them. Everyone should. They’ve earned it. They deserve it.”
Epstein’s contract, estimated at $25 million before the recent pay cut, ends after 2021. Is he up for another rebuild under potentially severe financial constraints or will he seek a new challenge elsewhere as he awaits his induction into the Baseball Hall of Fame?
Who knows?
The only thing we know about the future of the Cubs is that we know nothing at all.