That's the first line of this article in today's Tribune business section giving some details of the three remaining bidders for the Cubs -- the Ricketts family, Marc Utay, a Chicago native who now lives in New York, and a South African native, Hersch Klaff, who now lives in the Chicago suburbs. The article isn't specific, but I assume that these bidders are all bidding for both the team and Wrigley Field.
So all have Chicago connections; here's some of what the article says about each.
Business style: Tom Ricketts wanted to make it on his own and never worked at Ameritrade, now TD Ameritrade Holding Corp. A market maker at the Chicago Board Options Exchange and finance executive before starting investment bank Incapital LLC.
Cubs connection: Tom Ricketts grew up watching the team on WGN. Once lived in an apartment above a bar across the street from Wrigley Field. Met his wife in the bleachers at a Cubs game.
Cubs connection: Grew up a Cubs fan in Glenview. Admires how the Boston Red Sox owners have expanded the franchise's entertainment and sports assets. His investor group includes media investor Leo Hindery, who once ran YES Network, the New York Yankees' TV channel.
Resume: A South African who moved to Chicago in the 1970s and made his money in real estate, buying distressed retail properties. Formed Klaff Realty LP in 1982 and amassed properties in the Loop. Bought shuttered stores from Kmart, Montgomery Ward, Albertson's and Mervyns.
Business style: Low profile. But an aggressive dealmaker who works with private-equity firms such as Lubert-Adler Real Estate Funds and Cerberus Capital Management LP.
photo via artfiles.art.com
It appears that all three of these men/groups have deep enough pockets, even in the current economic crisis, to be able to fund the Cubs to continue being among the top payrolls in baseball. The clear leader to me, and my personal favorite, would be the Ricketts group, and I think they'll wind up as the winning bidder.
Finally, for anyone who thinks that a change in ownership means that someone would come in and "clean house", think again. First, the Cubs have been one of the most successfully marketed franchises in recent sports history. Why would you dump the people who accomplished that? Second, Jim Hendry and his baseball people have shown, over the last two years when they have been given financial resources, that they can put winning teams on the field. I would expect that to continue if resources are put into baseball operations -- I would argue that the Cubs need more people in player development and scouting, and hopefully, the new owner will commit money for this. Most likely, the new owner will step back and let the existing management structure continue to do their jobs, and hopefully, continue to put the money into player payroll as has been the case the last two years.
We await developments. This could happen as soon as the owners meetings next week (although the final consummation of the sale might not happen for a few more months).
0 recs | 158 comments
Agree on Ricketts
But i think all of the above would be a good fit
carolinacub - January 8, 2009
Ricketts seems to be the sentimental favorite
(mine included), but the real favorite will probably be the one offering the most money to Zell (assuming all are acceptable to the other team owners).
JohnM - January 8, 2009
Not necessarily the absolute "most dollars"...
… but the most favorable terms to Zell. I imagine all three of these groups would have no trouble being approved.
Al Yellon - January 8, 2009
Actually...
that’s probably no longer entirely accurate. Remember, this deal is also subject to the approval of the bankruptcy courts. You can expect a significant amount of scrutiny in regards to the dollars, and if the gap is large — large being less of a gap then it might have been a few months ago — they won’t approve it.
And the media reports are that their review proceeds the MLB voting process
Damen Jackson - January 8, 2009
not sure bankruptcy courts have to review
If I recall correctly, the entities in bankruptcy are not the Cubs or any entity which owns the Cubs.
However, I think the analysis is still correct in that the proposals must surely look differently now given the great sea change in availability of financing. Mark Cuban noted that in his blog entry regarding his bid.
TC Cubby - January 8, 2009
As far as I recall,
the Cubs were not included in the bankruptcy filing and as a result are not subject to approval by the court.
cowsarecool220 - January 8, 2009
That's purely an operational issue...
It’s still an asset sale by the holding company, so yes, the sale is subject to the review of the bankruptcy courts.
Damen Jackson - January 8, 2009
There was something about the franchise being an LLC and not subject to the filing or
court oversight.
N Oakley - January 8, 2009
Let me say this again..
their standing as an LLC removed them from the filing, as well as oversight, yes. That is an operational issue only. However, as an asset being sold by the company in bankruptcy, the pending sale is subject to court approval. And they will be significantly more concerned about the final number than anything else.
Damen Jackson - January 8, 2009
agree
they have sign off since the Cubs sale will effect the creditors
Ivy Walls - January 8, 2009
Are you 100% sure about that?
I would imagine Tribco removed them from the filing for the specific purpose of NOT having to have the court review the sale.
Al Yellon - January 8, 2009
Well, then that adds another layer of approval.
I wonder when the sale will be final. It’s ridiculous that it’s already been almost 2 years for this process.
cowsarecool220 - January 8, 2009
If I had to hazard a guess?...
Around the end of the season.
One interesting tidbit from CNBC earlier this week was that the actual plan for payment was not included in the bids, only the final number. You could easily see the winning bidder needed another 60-90 days alone just to hammer out the deal structure. Figure another 60 for the bankruptcy court to review, and if all goes well, a month or two for the owners vote.
Damen Jackson - January 8, 2009
I would imagine this will be discussed at MB's press conference.
It’s been speculated that he’s taking his physical this morning and they will have the press conference this afternoon.
This topic is sure to come up so hopefully some of Chicago’s intrepid reporters will probe this topic.
cowsarecool220 - January 8, 2009
Agree...
…I don’t believe the court would have any say in the final price of the asset (because it is not part of the bankruptcy filing), but they may indeed have a say in how the proceeds are distributed to creditors.
MPH73 - January 9, 2009
Bingo!
Al Yellon - January 10, 2009
I meant precede
by the way
Damen Jackson - January 8, 2009
I actually like what you have there about Marc Utay
It would be a nice story if a guy with such strong personal connections to the cubs became an owner, but I like what I am reading about Marc Utay from a business standpoint. The Red Sox are a model franchise. This guy understands, seems to want to emulate it and has people in his group with the knowledge to do so.
mjk83 - January 8, 2009
Yeah, I noticed that too.
Crane Kenney has mentioned he’d like to emulate the Red Sox both on and off the field. That’s a pretty good model.
Al Yellon - January 8, 2009
I agree
It would be interesting to see what Utay would bring to the table
CubFan in STL - January 8, 2009
I think he is a great option
other than Ricketts. Honetsly, both are fine with me, but I do like Utay’s ideals of modeling after the Red Sox.
I would also love to see someone put some money into Wrigley and make sure our children, and their childern, will be able to enjoy games there in the future, unlike money, I mean yankee stadium.
chrisw95 - January 8, 2009
I think all of these bidders would do that.
Al Yellon - January 8, 2009
I really hope so
As much as people complain about Wrigley, it is a part of the Cubs, and I would like to see it restored.
chrisw95 - January 8, 2009
As would I, and I believe it can and will be done.
Al Yellon - January 8, 2009
But...
Al, how do you address the MAJOR OBSTACLE to making over Wrigley Field that is the landmark status that is attached to it. I think the political and bureaucratic nightmare entailed will make a new owner conclude that the best move is to abandon Wrigley and build a brand new ballpark on the north side (probably near the Kennedy or in the Pilsen neighborhood).
What owner in his right mind is going to spend years and millions of dollars on lawyers to fight the city of Chicago and the Wrigleyville neighborhood on major renovation of Wrigley Field?
BLou - January 8, 2009
times are changing rapidly
City of Chicago is broke which changes the political climate. If the Cubs purchased air rights for $$ over Waveland and Sheffield to build or expand bleachers that is the kind of deal the Chicago would entertain and it would not effect the historic status.
What is the historic landmark? Brick and Ivy Walls, Scoreboard? Front Facade? Grass field?
Cubs have already expand the bleachers and added skyboxes?
Finally if Chicago wins the Olympics Chicago would like to have 55,000 seats available in Wrigley for a venue instead of 42,000
Ivy Walls - January 8, 2009
What would wrigley be used
for in the olympics?
I see a few more options before they use Wrigley.
chrisw95 - January 8, 2009
Nothing...
It’s too far removed from the tentative Olympic village, it lacks the suites and corporate grade seating for premium customers, and it’s probably about 15,000 seats short at minimum for all but the very smallest competitions.
You’d expect Soldier Field to be the secondary site for most activities.
Damen Jackson - January 8, 2009
Agreed
What a nightmare for people to get there from the main site.
StevenABQ - January 8, 2009
there are many venues needed
Soldier Field can be the track and field, but there is baseball, soccer, field hockey, softball and then there is the prospect that the MLB teams will have to play someplace in the two weeks or will they be on the road for the two weeks?
There are three major outdoor venues, Soldier, the Cell and Wrigley.
Ivy Walls - January 8, 2009
You're not going to use Wrigley Field
for anything but baseball in the middle of the damn season. I just don’t see it happening.
dtpollitt - January 8, 2009
It won't...
The proposed Olympic Stadium, with the United Center and Solider Field as secondary sites is the reality right now.
Damen Jackson - January 8, 2009
Does anyone else see Chicago a leading contender for these olympics.
I can’t help but assume that Blago and his pay for play allegations will scare the olympic committee who was accused of similar tactics in granting the Salt Lake City winter games.
N Oakley - January 8, 2009
No...
I know alot of people have trumped it up by suggesting the “Obama Factor”, but I’m not buying it.
I’d put the money on Tokyo right now. I don’t think Rio is quite ready, and with Spain’s lack of native currency leaving them with a very hard time economically over the next few years, I’d have to question whether they could actually foot the bill.
Damen Jackson - January 8, 2009
Chicago is a longshot to get the Olympics
It sounds like the International Olympic Committee really wants the 2016 games to be held on the South America continent for the first time ever. Meaning that Rio de Janiero is the city that they want to win. I keep reading things that suggest a lot of behind the scenes manuevering going on to make sure Rio de Janiero gets the bid.
A number of years ago people scoffed at the notion of Beijing. So don’t dismiss Rio de Janiero.
BLou - January 8, 2009
I still say they're
not ready for prime time, but I’d still rank their chances above Chicago.
Damen Jackson - January 8, 2009
I keep reading that the committee wants
to have the first in South America. I would also say whatever “Obama Factor” there was has been trumped by the “Blago Factor.”
N Oakley - January 8, 2009
I get that...
I’m just calling into question Rio’s ability to actually execute and pay for it
Damen Jackson - January 8, 2009
If there was one body I would never bet on,
it’s the IOC. I think it’s very hard to say what they will do. In the past, they’ve given Chicago politics a run for their money in the corruption competition and even though they claim to have cleaned up their act, I’m not convinced.
cowsarecool220 - January 8, 2009
But there is no more baseball in the Olympics
That was removed last year, so unless we have Hockey @ Wrigley again, (Which really rocked, BTW), I see other venues getting the nod first.
chrisw95 - January 8, 2009
They may reinstitute baseball as an Olympic sport.
The IOC hears petitions to add sports around the same time they pick the next Olympic location.
Flatley - January 8, 2009
True
but with Baseball being seen as an American sport, not trying top bring politics into this, I don’t see a French led IOC changing that, its way too American in their opinion.
Regardless that the last few gold winners were not the American team.
chrisw95 - January 8, 2009
Baseball is also big in South America, as well as the Pacific Rim.
When the IOC pulled baseball, the US was far from the only country protesting the decision.
Flatley - January 8, 2009
Yes
and I truly want Baseball back, but I saw that as more of a political disapproval move, than a “this sport isn’t a good olympic sport”.
I hope that the IOC will bring Baseball and Softball back. It was fun to see how the other countries had advanced and excelled in the sport.
chrisw95 - January 8, 2009
Yeah.
It was also nice to have a guaranteed gold metal in women’s softball.
I think their official issue is that none of the players in the majors play for a national team, so you end up with the second tier (at best) of athletes.
Flatley - January 8, 2009
As far as I understand,
the IOC was miffed MLB would not stop their season and send players to the Olympics like Hockey does. MLB responded by starting the WBC.
Personally, it seems like neither side needs the other so the likelihood of compromise is small. As a result, I don’t think it’s likely for baseball to return to the Olympics.
cowsarecool220 - January 8, 2009
That was true
but MLB wants, or says they want, to develop the game internationally. It kind of needs the Olympics to do that.
JohnM - January 8, 2009
yeah but...
Like CC220 said, MLB started the whole WBC thing. I mean c’mon, why screw around with the Olympics (Where Baseball is not center stage) when you can run your own tourny. IMO (which is probably way in the minority) I could take or leave the Olympics. At least the WBC has some of my interest.
StevenABQ - January 8, 2009
Because no one will watch it in countries which aren't in the WBC
And it’s not your interest MLB is after with the WBC.
JohnM - January 8, 2009
Yeah
I guess I am a selfish B*****d. I see your point, but I just don’t see USA getting that involved (in terms of players). Which is what has made Olympic baseball weak.
StevenABQ - January 8, 2009
But...
If you look at the fanaticism that other countries have, such as Japan, DR, and even Cuba, it makes little sense to remove it from the Olympics. The other countries see it as a sense on national pride, and I know the Japaneses shell out a ton for the Jerseys.
So regardless of American input, the IOC may be costing a ton of revenue by eliminating Baseball.
And the WBC will grow in its place, IMHO.
chrisw95 - January 8, 2009
The vote to eliminate was something like 51 to 49%
and I’m sure there were a number of votes cast by members with no interest either way, and doing so as a favor to either side. It’s true that anti-Americanism may have influenced a few votes too. The point is that it wasn’t some huge majority that wanted to dump baseball.
JohnM - January 8, 2009
I don't see baseball back in the Olympics....
… unless MLB agrees to send its players, which it wouldn’t during the season.
Al Yellon - January 8, 2009
Have you considered
The flip side? It would also be a MAJOR OBSTACLE to move to a new ballpark. Do you think that the local businesses and neighborhood are going to just sit back relax and watch their cash-cow dissapear? I’m thinking that too would be a bureaucratic nightmare. In addition, lets not forget (as I am sure Ivy Walls will provide an indepth analysis) that updates with a vision to full renovation have already been made.
StevenABQ - January 8, 2009
To that end...
…perhaps, in face of losing all the Wrigleyville cash flow, the City would be open to ditching the landmark status. The City can’t do much to stop the Cubs from moving, if that’s what the new owner will elect to do. (Not that they would, having already purchased Wrigley outright, but I’m just saying.)
Flatley - January 8, 2009
If there's one thing that's been proven in Chicago (and Illinois)
is that anything is possible if money is involved.
cowsarecool220 - January 8, 2009
Money Talks
and we know what walks.
The landmark status my be relieved for a period of time, especially if the state sees some money coming in by doing as such.
That way they can try o please everyone by simply lifting the landmark status and not removing it completely
chrisw95 - January 8, 2009
Sadly in Illinois it seems that
Bullshit follows the money.
N Oakley - January 8, 2009
And talk show hosts follow the bullshit.
Flatley - January 8, 2009
I see your point
But one has to think, if you can purchase an asset like Wrigley, utilize it to continue to generate revenue, perform improvements to increase the assets value, (in theory increase potential revenue streams) then scrapping it seems like a dumb idea. I also think that any future owner would do well to see how the “new” NY facilities affect their business models. This is going with the “if it ain’t broke” idea, even so, I think if a new ballpark ever was on the horizon, it is quite a way off. I would think they would milk the Wrigley Field asset for all its worth before taking on the burden of constructing a new park.
StevenABQ - January 8, 2009
Well, sure.
How many people have we heard say that they want to see a game at Wrigley? Hell, even some of the players at the Winter Classics said as much. Wrigley Field has a lot of caché, and while people would similarly turn out for the new Cubs’ ballpark, it wouldn’t have the staying power that the Friendly Confines has. No, I think it’s in the Cubs’ and the City’s best interest to work out some way around the landmark status, because Wrigley is due for some major reconstruction.
Flatley - January 8, 2009
Damn it.
-1 to me for failing the tagging test.
Flatley - January 8, 2009
+1
On the post, I share your viewpoint, and I think it is the most logical way to keep the present facility, but bring it up to modern standards.
StevenABQ - January 8, 2009
Exactly.
People keep on talking about how the Yankees blew up this, the Yankees changed that. We’re not the Yankees. We’re the Cubs. Our team’s identity aligns with maintaining the traditional values of baseball, and that, for better or for worse, is represented perfectly in playing in one of the oldest and most storied ballparks around.
Flatley - January 8, 2009
and that new stadium
yuck. And I say that as someone who went to many Yankees games as a child. I loved Yankee stadium.
drewishdrewid - January 8, 2009
Your sentiments
And others over time would likely have some impact on any decisions regarding Wrigley, particularly when if there is continued public outcry that maybe they should have brought Old Yankee stadium back to its previous glory rather than creating a new one. Sometimes people don’t realize what they had untill they have lost it…
StevenABQ - January 8, 2009
you rebuild
within those parameters. You don’t fight the City of Chicago. You work with them to make Wrigley better, while not messing with the landmark.
drewishdrewid - January 8, 2009
The only things that are landmarked, IIRC...
… are the ivy walls, the scoreboard and the marquee. Everything else can be rehabbed.
Al Yellon - January 8, 2009
The one criteria I want is for the ownership to have a name
individual at the front, a Steinbrenner/Reinsdorf type who is obviously a fan.
Based on that litmus test and reading your blue captured quotes, Ricketts and Utay both appear to fit the bill.
Klaff reads as more of a corporate raider and buyer of distressed assets. I’d be fearful he is waiting for the economy to turn so he could flip the franshise for fun and profit.
N Oakley - January 8, 2009
Business is business
re:
flachimesa - January 8, 2009
Easy, Worf
TC Cubby - January 8, 2009
I'm just saying I want ownership to be a fan, not just a business enterprise.
We’ve had that for years, time for a different approach.
N Oakley - January 8, 2009
What also concerns me about the guy is that...
… his business strategy seems to be in the line of bargain hunting. Do we really want a guy who will say “Why get the best when the second tier is far cheaper? Let’s take a flyer out on a falling star and see if he can’t be turned around.”
Will that happen? Beats me. But it’s possible.
Flatley - January 8, 2009
The best way to turn it around value wise would be winning, though, right?
I could handle making a deal with the devil if it means we finally get the monkey off the back.
halfblindcubbiegirl - January 8, 2009
But then...
You have to live with that devil perhaps for years after…
Hilary Lee - January 8, 2009
I doubt I'll climb down off cloud 9 for a while
I just want to win.
halfblindcubbiegirl - January 8, 2009
Clear leader
Al, I can understand why the Ricketts group is your personal favorite, but what makes you believe that he is the “clear leader” ?
CubFan in STL - January 8, 2009
They seem to have been keeping a higher profile than the others.
I don’t have any personal info about this. Just a hunch.
Al Yellon - January 8, 2009
the leader is who has the CASH
and willing to put it up.
Drive for show……..putt for dough…..
meaning putting the cash on the table and the biggest pile wins.
Ivy Walls - January 8, 2009
Well...
I’m rooting for Ricketts. Rooting hard in fact.
It would be interesting to see what would happen to the Cubs under Klaff. Klaff in particular focuses on extreme makeover of the management suite if you examine his acquisition strategy over the years. I’d have to believe a new team President and probably ultimately a new GM would be inserted under a Klaff.
Utay? I get the impression any purchase of the Cubs would be heavily debt financed. Can he scrape together the credit he is going to need to pull off the deal in these market conditions? Also, assuming he did, what would that mean for how he runs the franchise? He might end up doing an extreme makeover of his own in order to goose up the revenue making opportunity of the Cub franchise.
BLou - January 8, 2009
What are the chances that a new owner...
…develops an all Cubs channel, like the YES network?
cubswynn - January 8, 2009
Probably a very good chance.
I’d think that would be a real good way for the Cubs to make money.
Al Yellon - January 8, 2009
Al, do you know any specifics of the Cubs deal with ComcastSportsNet?
I know the Cubs own 25% of the the channel, but how hard would it to be for them to break their contract with Comcast and start their own network?
Mordecai - January 8, 2009
depends what are the terms?
The deal was probably contracted as to a number of games per season but it had terms and it had dissolution procedures.
those are the details where often the devil resides in any deal.
Ivy Walls - January 8, 2009
Don't most of the other networks
also show other professinal sports (NBA, Hockey) in the offseason?
I wonder how that would impact the start of a new network as that wouldn’t be an option because of the existence of CSN Chicago?
cowsarecool220 - January 8, 2009
Without a doubt
And it’d be great for fans. I’m not exactly sure what goes on when the Yankees aren’t on TV, but I assume they show a lot of old games and Cubs related talk shows. I for one would love something like that.
cubswynn - January 8, 2009
Following the YES Network model
we’d get to watch “Cubography,” which would study Cubs of the past, so we’d learn about Shawon Dunston and Vance Law.
Though, the Cubs could easily do a “Cubs Can of Worms” feature as the Cubography, too.
Bill Potter - January 8, 2009
I'd love to see a Behind the Music type show on the Cubs
Where players could be frank about what was actually going behind the scenes during particular seasons.
cubswynn - January 8, 2009
Behind the Ivy: the 2006 Cubs
“the Cubs were off to a good start, playing the rubber game of an April series in Los Angeles. Little did they know that as the sun went down at Chávez Ravine, an incident would occur that would have lasting ramifications and result in the proverbial snapping of a toothpick…”
Bill Potter - January 8, 2009
Okay maybe I don't want to see that show.
Just reading that made me sick to my stomach.
cubswynn - January 8, 2009
That's the Behind the Music m.o.
I’m afraid there might not be good endings for most years…
Unless they tied 2006 together with the “reunion and sobering up” of the team in 2007…
Bill Potter - January 8, 2009
Exactly
Too many seasons end in tragedy. There’s a reason why I’ve only watch the Bartman game a hand full of times. Instead of having a Chili Peppers like show, we’d be more like the Milli Vanilli where it cuts to a black screen saying one of the guys committed suicide.
cubswynn - January 8, 2009
I still haven't watched that game
I know what happens. No need to rehash it.
You’re right, though, most “Behind the Music” episodes for the Cubs would end with a slow clip of something bad happening, with ominous music in the background, followed by a fade to black.
Bill Potter - January 8, 2009
Here's the reason why I have watched it again
Because it’s a good reminder to know how close we came. It’s fun to relive the first 22 outs of that game, seeing Wrigley-ville going nuts. But yeah, turn it off after Bartman shows up.
cubswynn - January 8, 2009
That's fair enough
Bill Potter - January 8, 2009
Hard to tell on what is being marketed as to whom would be better
All have good resumes in amassing wealth and enterprise, with a corresponding affinity to the Cubs. Look unless there is some super-natural event the Cubs are not going anywhere (as in moving). I think there is a sense that whomever emerges (it will be money because the bottom line is that the Bankruptcy Trustee/Judge will demand the highest return for the creditors) and the sale will probably be clean, meaning the Tribune Co and subsidiaries will get severed from an ownership basis, that does not mean that business relationships with WGN and Comcast will not be severed in the short term.
That then begs the question as to UTAY’s cartel who possess media experience. BTW the media landscape continues to change where I see that the Cubs WGN TV broadcasts being cut to possibly Sunday’s and driving more to MLB’s properties. I can foresee something intriguing as offering a Saturday game broadcast on pay per view on cable/satellite for Saturday games and possibly other packages ast the penetration of MLB.TV continues.
To me why the NYY’s have such a big $$ advantage is three-fold, they have 57,000 seats that they sell out at premium prices over 90, they have the largest media market well developed and have amassed a generation of capital. Cubs have 42,000 seats, (a beginning deficit of 1.2M no matter what) plus the 3rd media market by under 50.
The issue with the Cubs is expanding new revenues. To me answering that question is who makes for a better owner: Potential plans: Build new bleachers w/upper deck in LF/RF…how many seats added? Build skyboxes on roof? This would be an investment.
Is Wrigley for a total overhaul? Rebuild upper deck? Add seats, skyboxes. Use that to redo the Field boxes as genuine premium seats? Or build a replica of Wrigley with increased attendance and revenue stream? I would like to see that vision.
The short-term thinking about how this ownership group integrates with the current 1 year or 2 year club is not as important as the 5 year or 10 year plus vision.
Finally as a fan look to what Mark Cuban said about GM’s, are they really focused on winning a championship or protecting their job. What kind of scoring with these owner groups have on who they employ to do what? Understand for all the Tribune assets they really never were fixated on winning a championship, it was their corporate culture.
Ivy Walls - January 8, 2009
I'm confused...
So…new owner means adding 25,000 seats?
PurpleLineToWrigley - January 8, 2009
in part I would like to see their vision as to how they are going to increase revenues
Cubs have maxed out their revenue stream for the current business…2nd highest FCI prices to Boston, media penetration, 98% attendance, high branded index et cetera. To be healthy in comparison to the rest of the big market competitors how will these respective ownership groups continue to increase their revenue base?
Owners..own. That means they are responsible for generating assets to run the business. Investment means putting resources into revenue streams. One can say that the best talent on the field is a financial investment to sell seats……the by product financially is how well the talent performs, but performs how? Is performing for marquee attention or performing for championships?
No question the market thirst (demand and attention) is for the Cubs to win a championship (not unlike Boston a few years back) but once that is done the market demand is to keep at a high championship level.
I think adding seats is necessary. Tribune did it incrementally with small investments. Added some premium seats on the infield, in the bleachers and moved the attendance from 38,500 to 42,000 worth about $6.3M annually. Fine that is a nice increase but 15,000 is worth $51M. That does not include new license fees that possibly would generate $25M.
Now if I add $75M to the revenue base that equates to $37-42M in payroll budgets.
Ivy Walls - January 8, 2009
I think adding 25,000 new seats
would truly suck.
drewishdrewid - January 8, 2009
Eh. Maybe
but it can be done. Didn’t they add several thousand to Fenway a few years ago? And Fenway still looks like Fenway. You should be able to do that with Wrigley and still make it look like Wrigley.
halfblindcubbiegirl - January 8, 2009
it would make Wrigley
nearly over 60,000 seats. That’s way too many.
drewishdrewid - January 8, 2009
There's no way 25,000 seats would be added.
Most new parks have about 40,000-42,000 seats, exactly what Wrigley has. The big money is in skyboxes and luxury club seats — that’s where they would likely look.
Yankee Stadium is an exception, and the NY market is big enough to have a stadium that big. Even the Mets downsized from 55,000 to about 41,000 with Citi Field.
There’s no way that many seats will ever be added — in fact, I doubt any seats will be added at all.
Al Yellon - January 8, 2009
Actually I think the most the Cubs can expand is 2500 seat in the bleachers
If they got air rights over the sidewalks. They possibly could add new skyboxes on the roof which would probably be an interesting engineering feat, but it could be done, that would add 500 or so seats.
3000 seats in all.
Another idea is to make the current area that has the juniper trees an indoor section with an engineered hitting background, possibly another 100 seats like an indoor party room.
Ivy Walls - January 8, 2009
No way.
The bleachers were just rebuilt. There’s no chance that they’ll do that again so soon — and they ALREADY are built out over the sidewalk.
Al Yellon - January 8, 2009
I'm not saying you'd actually add 25K
but lots of seating could be added and still maintain Wrigley if done properly.
halfblindcubbiegirl - January 8, 2009
But there's no need to.
All you’d be doing is adding a lot of crappy seats that you couldn’t make much money on.
The big dollars are in the skyboxes and changing EXISTING seating into luxury club seating. That’s where I think the Cubs are headed.
Al Yellon - January 8, 2009
NEW OWNER = NEW $$$ ...MAYBE
Well let’s hope the new owner has a long term vision for the club . Most would and to tweak some more high money seats or boxes might be it . But I am sure a Cubs Chnl would be a very hot item……..
cubs north - January 8, 2009
research in depression economics
Listen the world changed the last year.
The US laid off more than 2.65M people in 2008 The market lost HALF its paper value. We have been in a recession for at least a year, (and it was hidden from the general public for a half a year, don’t be naive, it was known by many), this recession is going to go through 2009 and into 2010 and possibly thru 2011. If you know anything the Bush years have a 11.5M job deficit against population growth.
Depression Economics will offer opportunities to some areas and disasters for others. One big item is home based (incrementally inexpensive entertainment). I was talking with Comcast and they reoffered a deal to me for another year to keep my digital box because I threatened to go. They are losing those customers at a high rate.
So a network will be an opportunity if it is done well. But understand that might take away from some gate receipts. This is threading a needle.
Ivy Walls - January 8, 2009
Ivy, surely you can spare us the Econ lesson, yes?
And I really don’t think that’s what Krugman meant when he spun the term.
Damen Jackson - January 8, 2009
+1
Not to be a jerk, but dang I’m starting to think of BCB as 1st period…waiting for the bell to ring.
StevenABQ - January 8, 2009
The only source I heard saying the recession will go through 2011...
…is some crackpot Russian who believes the United States will fall apart in 2010, with Illinois being swooped up in a Canadian land-grab. Really, it’s good for a chuckle, and apparently is being accepted pretty widely with the Russian babushkas.
Flatley - January 8, 2009
You can't even get Roubini --...
by all accounts one of the most bearish economist alive — to suggest a recession lasting into 2011, let alone a Depression.
Damen Jackson - January 8, 2009
That's not to say that the rest of Ivy Walls' post has no merit.
I’m just nitpicking, not seeing the trees for the forest (or something like that). Sorry, didn’t mean to detract from your point that a suffering economy could create such an opportunity for the new ownership group.
Flatley - January 8, 2009
No, I think he summed up the state..
of the economy quite well. But I take umbrage with the term Depression Economics, for a variety of reasons. I’ll leave it at that.
Damen Jackson - January 8, 2009
Well, sure.
But, again, trees for forests… or forests for trees.
Flatley - January 8, 2009
I guess I have an early wind of the 2010 BLS job projections
We are expected to lose jobs at the current pace through the next quarter….and not see any job growth in 2009 period….
this falls into the 2010 and hopefully by the 3rd quarter of 2010 we will begin to see a recovery or signs there of.
some of the Hedge Fund people have privately said into 2011.
Ivy Walls - January 8, 2009
Of course they said that.
They have to HEDGE their bets!
hur hur hur
Flatley - January 8, 2009
Just thought I might provide you at least one public clue:
John Mauldin is one of my favorite Hedge Fund Newsletter guys…Here are a few excerpts from his semi-annual US Economic Report Dec 15th, may I suggest you all read it in its entirety
The recession is now running on all four cylinders. We’re referring to the four phases of the downturn that we identified much earlier and discussed in numerous Insights.
Phase 1, the collapse of the housing sector, touched off by the subprime slime, as we dubbed it,…Phase 2, the spreading of the woes to Wall Street, commenced with the implosion of two big Bear Stearns hedge funds in June 2007. These first two phases are largely financial, and persist today.
Worst Since The 1930s
Of course, in what will probably be the worst financial crisis and deepest recession since the 1930s, it’s not surprising that Depression-era bailout structures are being copied.
Phase 2 of the recession, financial woes, are, of course, a global phenomenon. And so are the responses. The U.K. initiated the direct injection of government money into banks to buy preferred stocks…
Phase 4 of the recession, its globalization, is clearly underway with almost every major country’s economy falling whether or not the official recession label has yet been applied. One indicator of weakness is the 2.4% decline in global semiconductor sales
Recession Ends When?
If policymakers succeed in containing the mortgage mess and bailing out financial crises related to consumer borrowing, commercial real estate and junk securities — and other financial problems we haven’t explained in detail — then the recession may well end at the end of 2009 as massive fiscal stimulus begins to take hold. If not, it probably will extend well into 2010 and perhaps beyond.
To end the crisis, four developments are needed, in our view. The elimination of excess house inventories will probably continue until at least the end of 2010, as discussed earlier. The writedowns and recapitalizations of financial institutions — at least those related mainly to mortgage-related problems that have unfolded so far — are well along.
Deflation
For years, we’ve been forecasting that chronic deflation of 1% to 2% per year would start with the next major global recession. Well, it’s here! In October, the U.S. producer price index fell 2.8%
Note the worst since WWII and possibly worse since 1929
this is what really counts
and this is my favorite
You can say that at least we are better than Hoover and the world in 1929 but are we?
Ivy Walls - January 8, 2009
Very interesting read.
I’ve been hungry for things like this. Do you have any other economic/financial literature to recommend (not necessarily pertaining to the recession, just in general). I’m reading a lot of “junk food” books, and find myself recently starved for some good conceptual texts.
Flatley - January 8, 2009
Depends where to start
Usually when I want to get people to really think I tell them to pick up John Stewart’s “Evolution’s Arrow” and “Non-Zero Sum” by Robert Wright.
There are books that challenge the neoclassical economics which is in part the problem so Heterodox economics is an interesting thought provoking item. All econ thought in the end is obsolete as the Green Economy comes into play since capturing and addressing carbon footprint which is only the start will have to be incorporated into Capitalism. In short we are getting closer to a school of thought known as Social Economy School that involves both the private sector and public sector with a new layer that includes NGO’s, non profits, cooperatives and even environmental and health issues that are not purely Adam Smith motivated.
Now for the baseball junkies, baseball is not played in vacuum and for those who want Peavy it is economics preventing it. How the economy effects the club will effect how many fannies are in the seats, how much money they spend and whether sponsors find value….all this relates to who the Cubs can afford.
Oh that is boring.
Ivy Walls - January 8, 2009
Oh man.
The baseball season needs to start.
dtpollitt - January 8, 2009
+1
n/t
Damen Jackson - January 8, 2009
haha
I like this kind of stuff. Certainly not BCB-appropriate (inasmuch as there’s no mention of baseball in the post), but fomr someone like myself, it’s welcome.
But yes, baseball needs to start, and fast. However, I’m finding the Blackhawks to be a pretty reasonable team to help fill the offseason.
Flatley - January 8, 2009
Start at the beginning then...
Grab a copy of the “Wealth of Nations”. You’ll understand how free markets were meant to work.
Most economists are just hacking off of Adam Smith anyway.
Damen Jackson - January 8, 2009
meant?
real economics is reality of what is happening, not something that should happen.
Ivy Walls - January 8, 2009
BTW Adam Smith got it only half right
Adam Smith is no Da Vinci or Newton or Einstein
Ivy Walls - January 8, 2009
I've read WoN a couple years back.
I can always rehash an old read, but I feel like I’m copping out when I do that. Thanks for the recs, Ivy. I’ll have to stop by my local B&N and see if they have any of these books in stock.
Flatley - January 9, 2009
That would be reason #1 why I haven't been around much...
too much OT (or tangent stuff)
halfblindcubbiegirl - January 8, 2009
Dude, I come here to escape things like the recession
not read about them. You’re depressing me. I’ll go to Bloomberg or MSNBC for this.
PurpleLineToWrigley - January 8, 2009
I come here to trade fashion tips...
santoswoodenlegs - January 8, 2009
Consider yourself traded
PurpleLineToWrigley - January 8, 2009
I am reading his book
and Alter’s, fascinating……
Ivy Walls - January 8, 2009
I'm sure it is...
but you and I both know what Depression Economics is code for, and I’m afraid I’ve already had my fill of Keynes and the Woolfs for the year.
Damen Jackson - January 8, 2009
You tough
negotiator, you!
I guess you made Comcast an offer they couldn’t refuse.
StevenABQ - January 8, 2009
Does Klaff has any known connections to the Cubs?
Ricketts and Utay are obviously big Cubs fans, but the Trib article doesn’t even say whether Klaff even likes baseball. That has me a wee bit concerned. Of course, I’d guess that he’s the longshot of this trio, but that’s purely speculative – and a few months ago I would’ve put my money on Mark Cuban buying the team, so my speculation isn’t worth much. Does anybody here know anything about him beyond what the article has to say?
hip2bsquare - January 8, 2009
TD
Does TD Ameritrade’s purchase today of thinkorswim for $606M have any effect on possibly pulling the trigger on the Cubs for the Ricketts family?
cubbot - January 8, 2009
I wouldn't think so
because Ameritrade is not involved in the purchase of the Cubs.
It’s a separate investment group that was created for the purpose of purchasing the Cubs.
cowsarecool220 - January 8, 2009
agreed
Just wondering if Ricketts was focusing his attention on his primary business
cubbot - January 8, 2009
Its the son who is trying to buy the Cubs
He is removed from the family business of creating and managing TD Ameritrade.
BLou - January 8, 2009
How romantic
that the Ricketts met in the bleachers in Wrigley. Now that we know who the three are it will be interesting to see who buys them.
sue369 - January 8, 2009
Romantic, or were they both just hammered?
I kid, of course. Maybe.
PurpleLineToWrigley - January 8, 2009
Are you suggesting that young people imbibe in alcolholic beverages in the bleachers?
That’s heresy!! None of the fine young people I’ve ever met in the bleachers would never overindulge in such a manner. I think the publisher of this fine electronically transmitted publication might have a word with you about your blasphemous remarks of the patrons of Cubs Park of which he is a member.
Mordecai - January 8, 2009
I may or may not be drunk right now.
PurpleLineToWrigley - January 8, 2009
sigh
sue369 - January 8, 2009
I worry
that that the Cubs may be the only team in all of sports with a disincentive to win a championship (for the owners that is). If the Cubs win the WS, the pressure would be on to win another one. As is, they are a cute story with a rabid fan base.
Look at “the other Illinois baseball team”. In ’05 when they won, they were as popular, if not more, than the Cubs. 06 slightly less and in 07 back to normal. Even in 08, with a division title, they lagged behind the Cubs in popularity.
Will a WS champs Chicago Cubs remain as hot as they are as “lovable losers”? This is the question the new owners need to ponder.
ChicagoRobb - January 8, 2009
They would stay popular
The post-2004 Red Sox have been as popular, if not more so, than they were prior to winning a World Series. I would imagine a world champions Cubs team would be extremely popular and a boon to the franchise.
I would argue that the goal for the Cubs isn’t to win 1 World Series, but to put themselves in a position to win multiple World Series.
Fans now realize that the Cubs should be able to spend enough to put a competitive team on the field year-in, year-out. If a new owner comes in and thinks they will be able to keep the team viable as “lovable losers” while the team loses more than it wins, they’ll be mistaken.
Bill Potter - January 8, 2009
I agree with your assessment.
In terms of probable projections, I would think we’d align much more strongly with Boston (historically losing team that wins; large national following does not diminish) than with the White Sox (historically losing team that wins; small national following does not diminish). I wouldn’t go so far as to call the White Sox a small market team (because they’re hardly that!), but the Cubs have a following on an entirely different tier, perhaps a half step below the Yankees and Red Sox.
Flatley - January 8, 2009
Paging Crawdad...
dtpollitt - January 8, 2009
I just realized
I’m not wearing white socks today.
drewishdrewid - January 8, 2009
I dunno.
we’ve been cubs fans while they sucked. We’ve been cubs fans while they won the division and got swept in the post. I’m pretty sure we’ll stay cubs fans after they win the whole f’n thing.
drewishdrewid - January 8, 2009
Is GameBoard gonna be introduced via conference?
What the hell are they waiting for?
dtpollitt - January 8, 2009
Yes...
annoying questions from reporters can get his dander up…and make him mad.
You wouldn’t like him when he’s mad.
santoswoodenlegs - January 8, 2009
GAMEBOARD SMASH!
HUR HUR HUR
drewishdrewid - January 8, 2009
I can't wait for this press conference.
dtpollitt - January 8, 2009
I just got the gameboard label
Thats funny….
As far as these three finalist to buy the Cubs… what are the chances of a change in the name of Wrigley Field?.. It seems since the finalist are more individuals and private firms that that corporate stamp on wrigley fields naming rights is less likely… but then again I have no idea… anybody know where we are in that situation?
SouthsideCUBSfan - January 8, 2009
So basically...
We have:
-A group of owners with strong connections to the Cubs / Wrigley and the city of Chicago.
-A group of owners with tenuous connections to the Cubs, and a fair amount of Red Sox and Yankee connections.
-An owner who isn’t from Chicago, let alone the U.S., and perhaps doesn’t even like baseball.
Hmm…. I guess I know who I’m rooting for!
Hilary Lee - January 8, 2009
I'm worried
about Utay’s partner, Leo Hindery. His history is one of exaggeration and self-promotion. Aside from his involvement in YES, he was head of cable TV’s worst company, TCI, and then of AT&T Broadband, which bought TCI. Any area cable subscribers remember the customer service disaster that characterized those companies? Hindery’s own family has debunked much of his autobiography. See this Huffington Post profile of a year ago when Hindery was a key member of the Edwards for president team: http://www.huffingtonpost.com/barry-orton/edwards-campaign-living-i_b_80134.html
One quote from a book on the AT&T Broadband debacle says plenty:
“It was never clear to AT&T executives if Hindery stretched the truth on purpose, or if he just dwelled in a very grey world where black wasn’t always black, and white wasn’t always white.”
This is not the guy we want in charge of Cubs video distribution!
santo4hof - January 8, 2009
Hindery is an investor.
He wouldn’t be in charge of running anything.
That said, I’m still in favor of the Ricketts group.
Al Yellon - January 9, 2009
You must Login with your SB Nation account and be a member of Bleed Cubbie Blue to post a comment.