Cubs’ Improvement Just an Intricate Ploy To Increase Profits: A Sunny Little Parody

As the Cubs return to Wrigley for what may be the last homestand of the season, I wanted to look back on how — and why — the organization go to where it is.

Even with zero or limited bleacher capacity for the first few months of the season, the Cubs managed to draw nearly 3 million tourists to Chicago’s largest beer garden in 2015. For the most part, the hordes came to see a baseball team that had finally started to show its first signs of relevance since the Theo Epstein brain trust took control. For the last few years though, it’s been more like Ineptstein, amirite?

After 4 consecutive seasons of decreasing payroll numbers, the Cubs actually spent money on veterans who still had some gas in the tank. Never mind that the biggest chunk of that went to an aging pitcher who can’t throw to first base, Tom Ricketts opening up his notoriously tight wallet was enough to send fanboy bloggers everywhere into delirium over the team’s chances. But was the increased spending really a big deal?

Adjusted for inflation, the $120,337,385 laid out for the 2015 payroll is more like $108 million in 2008 terms. That’s $12 million less than Jim Hendry had, and we all know how hamstrung he was by the Tribune Company and their penny-pinching ways. Well, okay, there was a significant increase in payroll from ’07 to ’08 in an effort to increase the team’s value in the eyes of potential buyers. That potential buyer turned out to be the Ricketts family, a group of money-hungry capitalists masquerading as fans.

Sure, they’ve sold the masses on the grand plan of rebuilding both the Cubs and their venerable cathedral, erecting giant video boards and signing up legacy partners galore to fund the whole deal. And some of you saps think it’s all for you, that they truly care about providing the fans with a better experience at and around the ballpark. You think they’ll actually pursue another big-money starter or that Kris Bryant and Jake Arrieta will get their due with massive extensions.

You must be drinking too much of the American adjunct lager Ricketts is getting a quarter billion (yes, with a B) dollars to peddle. Or maybe you prefer the wolf in goose’s clothing, that Chicago beer now brewed in the Empire State. Just don’t go thinking the Cubs are going to start acting like the Yankees. No, they figured out how to squeeze the lemons a lot harder just by making a few small changes.

For a look at just how much juice that got them, take a look at the following facts, courtesy of Market Watch’s Tim Rostan:

• Wrigley Field game attendance is up more than 300,000 from the 2014 season, notes the local NBC affiliate.

• Per-game attendance has risen by almost 3,500 per game, reports Crain’s Chicago Business — even with swaths of bleacher seating unavailable during the season’s opening months due to ballpark-renovation work that had fallen behind schedule.

• If the Cubs prevail in the play-in against the Pirates, it would effectively ensure the team’s first annual attendance figure in excess of 3 million since 2011.

• Viewership of Cubs telecasts on Comcast SportsNet Chicago has more than doubled since last season, according to Crain’s Chicago Business.

• The Ricketts family owns as much as a quarter of Comcast SportsNet Chicago, per Crain’s.

• In addition to installing enormous, lucrative and controversial electronic scoreboards (or do you say “billboards”?) in left and right fields, flanking the historic manually operated board in center, the Cubs have expanded the rolls of “legacy partners” — that is, top-echelon corporate sponsors making long-term agreements — from three at the start of the 2014 season to 10 today. Those legacy-partnership pacts, reports Crain’s, are worth up to $9 million apiece per year.

• Assets to which sponsors’ names are yet to be attached — a plaza outside the ballpark upon completion of the multiyear renovation project, for example — are now worth 30% more than they were a year ago, Crain’s cites a sponsorship consultant as having estimated.

To see just how much fleece Tom Ricketts is harvesting from all those sheep coming through the pens, er, turnstiles, let’s put some conservative dollar figures to it. At an average cost of $44.81, those 300,000 additional butts in seats equate to $13,443,000. But that’s just the start. Add in parking, programs, food/beverage, and a shirsey or two and you’re looking at another $120 or so per family of four. That’s another $9 million in revenue, of which the Cubs take roughly $4 million.

So that’s $17.5 million or so and we haven’t even gotten to the legacy partners, whose contributions to the Ricketts’ Family Slush Fund could be as high as $90 million. All of a sudden that $28 million payroll bump seems pretty insignificant, doesn’t it? It’s little more than sleight-of-hand misdirection aimed at keeping everyone from seeing what’s really going on.

Alright, sorry, I just can’t keep going with this any longer. I tried to walk a mile in a Sun-Times scribe’s shoes and I’ve already got blisters. I don’t think any of the facts I presented are incorrect, but the manner in which I presented them was skewed by an agenda that didn’t necessarily run parallel to actual circumstances. But here’s the thing: I do believe that Tom Ricketts is out to make money. And that’s fine.

This is a professional sports team and it’s a very old and potentially lucrative one as well. I don’t begrudge Ricketts the ability to turn a hefty profit off of his sizable investment and I feel pretty good about the way he and his family have gone about doing it. I’ve always scoffed at those who decried ownership’s motives, claiming that they’d never try to improve the on-field product because Wrigley always sells out anyway.

Makes total sense…until you consider that 2015 was the first season since ’08 that attendance was actually up significantly year over year (went up 10,000 from ’13 to ’14). In fact, total attendance in each of the two previous seasons was down roughly 600,000 from the all-time high of 3.3 million during the Cubs’ most recent playoff season. With the obvious caveat that I’m not factoring inflation into the mix, just take the fan costs above, double them, and then subtract from the bottom line.

That’s a drop of roughly $53 million in revenues, not to mention the dearth of huge sponsorship deals. I’m not saying there might not be other ways to go about the process, just that it’s completely asinine to have made the assumption that the Ricketts family was cheap simply because they wanted to increase revenues. Of course, many fans saw their team’s gutted payroll and assumed the worst. But that’s like being mad at an overweight friend who made some lifestyle changes and got into really good shape.

There’s certainly a point of diminishing returns at which extra payroll and new additions to the ballpark no longer generate the same value in revenue, but I don’t think the Cubs are there yet. I’m not a financial guy (I know, shocker) and I didn’t talk with one about this post — though I’m sure I can think of a couple who’d be willing to correct/chastise/berate me over my calculations and assumptions — but I think it’s fair to say the Cubs are doing okay financially at this point.

Think about it: they’re looking at the very real possibility of 95 wins with a payroll that is significantly lower than those they bore through the end of Hendry’s regime. At that point, they were basically throwing money into the fire and hoping it would fuel the train. Money burns hot, but it burns fast too. It hasn’t been fun or easy, this switch to a hybrid engine, but it sure looks as though the Cubs are headed in the right direction.

We’re not going to see them jump to Dodger-level payrolls anytime soon here, but don’t be surprised when they ratchet it up a few notches. A lot of that will be thanks to the ticket you bought, the encased meat you bought from Hot Doug’s, and the Goose Island you quaffed. Makes it easier to justify that extra one now, doesn’t it?

In the end, all I really want to say is that bad narratives suck and that I still feel a little dirty after just swimming around in one for a few minutes. And while they won’t be going anywhere anytime soon, it’s kinda fun to be able to stand here now and thumb my nose while saying, “Nanny-nanny, boo-boo!” I’m mature like that.

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