Day Two of the 2014 Cubs Convention: Cubs Business Operations Update

Crane Kenney and his business operations department was the first session of the afternoon. The Cubs President of Business Operations provided updates on the team’s finances, the TV and radio contracts and the Wrigley Field Restoration project.

The Cubs’ contracts with WGN TV and Radio expire after the 2014 season. Crane Kenney is expecting to make an announcement by Opening Day about their radio partnership. Even though Pat Hughes is an employee of WGN, the Cubs have made it clear that if the team leaves 720 WGN, they are taking Pat Hughes with them. As Crane Kenney said, Pat Hughes is the Voice of the Chicago Cubs.

The Cubs recognize how important WGN TV is to their history and a small package of games could be broadcast moving forward on WGN, or none at all. The Cubs do not have a timeframe on when they will have their TV contracts set for beyond the 2014 season. The Cubs are under contract with Comcast SportsNet through the 2019 season.

The video board in left field should be installed by Opening Day in 2015. And Clark the Cub is here to stay.

The business ops department is working on the agreement with the rooftops. The Cubs feel they are close and are optimistic it will all be resolved soon. The hold up with the Cubs starting any part of the Wrigley Field Restoration project is the unresolved issues with the rooftops. The rooftop club owners have promised to sue if the Cubs begin the project without an agreement in place. The rooftops would challenge the zoning for entire project and not only the parts of it that would obstruct their views

Crane Kenney signed a five-year contract extension with the Cubs last year.

Cubs Business Operations Update

Crane Kenney spent a majority of the session updating the business side of the Chicago Cubs. Kenney read his resume to the large crowd and admitted he was the one that signed the contract with the rooftops and the Cubs current TV deals in the process.

The Cubs are trying to grow their business as fast as they can in order to support the baseball operations department. Kenney labeled the Cubs as a ‘100-Year-Old Start Up’. And why did he do that? Because the Cubs began in a ‘old garage’ like Apple and IBM.

After the Cubs broke off from Tribune, they had to start over with their infrastructure. 165 of the 277 people currently employed on the business side have been hired in the last four years.

The Cubs’ goal is to become the ‘Best Organization in Baseball On and Off the Field.’ The Cubs plan to serve the fans better and have turned to Disney to train their employees to help with the Wrigley Field experience.

Winning on the field starts with having great facilities. The Cubs have state of the art facilities in the Dominican Republic and in Mesa. The Cubs have gone from having the worst facilities in both locations to the best facilities.

The Cubs moved their offices out of the ‘old garage’ at Wrigley Field in March of 2012 to new state of the art administrative offices. But the most important facility that needs to be improved is Wrigley Field. Kenney explained the Ricketts family is willing to spend $500 million to restore Wrigley Field and improve the surrounding areas of the park without any public subsidies.

The Cubs are very fortunate to play in a neighborhood and they are almost to the point they can begin restoring Wrigley Field. The team has all of the necessary approvals from the city. The issues with the rooftops remain the problem and the holdup.

The Cubs need four guarantees from the rooftops.

  1. Enforcement of Current Capacity Limitations
  2. Protection against ambush advertising
  3. Ability to expand and add bleachers and advertising
  4. No lawsuit

The Cubs must be certain the rooftops will not pursue legal action before the project will begin. The two sides have made progress. Kenney explained the rooftops are a $20 million drag on their business.

Winning on and off the field is what matters and it all starts with ownership. The Cubs owners are committed to using resources generated by the team back in the team.

While the restoration project is at a standstill, the Cubs still have to pay to maintain a 100-year old house. It takes “tens of millions of dollars each year” just to maintain Wrigley Field. Once the restoration project is completed that money can be used on the team.

The Cubs pay the highest taxes in all of baseball, $17 million, which is three times more than the Blue Jays and 17 times more than the Giants … the Red Sox and Dodgers do not pay any taxes. The agreement to buy the team required debt to be taken on. The way the sale of the Cubs was structured by Sam Zell, anyone purchasing the team would have had the same structure. The debt structure was not set by the Ricketts family.

The Cubs can add revenue to the team through media rights, corporate partners, non-game revenues and gate receipts. The Cubs are not raising ticket prices. Kenney pointed out the Cubs were one of the first in the industry to use dynamic pricing and they are looking into launching a pilot program this season for digital tickets.

The radio and TV contracts with WGN expire after the 2014 season. “We love our partners at WGN Radio,” Kenney explained. They are going to try to extend their relationship with WGN Radio but they are talking to other outlets. An announcement should be made by Opening Day on the Cubs radio partner.

The Cubs recognize how important WGN TV is to their history and a small package of games could be broadcast moving forward on WGN, or none at all. The Cubs do not have a timeframe on when they will have their TV contracts set for beyond the 2014 season.

Under Armour remain partners with the Cubs and will sponsor such players as C.J. Edwards, Nate Schierholtz, Welington Castillo and Albert Almora during the upcoming season.

The Cubs love Clark the Cub. Kenney explained he was in development for over a year and their research showed kids can relate to “large furry animals.” Clark will not be a mascot in the truest definition of the word. The Cubs will respect Wrigley Field in relation to Clark. He will not be standing on the top of the dugouts, riding a bike in the outfield, or shooting t-shirts. When pushed on the subject, Allison Miller said, “Clark is here to stay.”

Highlights from the session with Rick Renteria and his coaching staff will be posted on Sunday.

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2014 Cubs Convention Reports

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  • Tony_Hall

    Neil,

    I was unable to follow any of this yesterday, yet you make me feel like I didn’t miss a thing. Thank-you for all that you do!

    • http://chicagocubsonline.com/ Neil

      Thanks Tony, I really appreciate it.

  • Ghostdawg

    The Cubs Convention reporting by CCO has been amazing! Thanks

    • http://chicagocubsonline.com/ Neil

      Thank you very much. I’m glad you liked the coverage.