Mike Ozanian spoke with Cubs Chairman Tom Ricketts while the team was in New York for the YES Network’s Forbes SportsMoney. Rickets talked about the importance the Wrigley Field Restoration project will have on the team’s finances. And what a restored Wrigley Field could add to the team’s baseball budget.
Tom Ricketts realized a couple of years ago the way the team was being built would not translate into long-term success. Ricketts pointed out that with a good farm system, along with the financial flexibility the team will have moving forward, should allow the Cubs to have a lot of success in the years to come.
Lede: In 2009 amid an earth shaking financial crisis, the Ricketts family bought the Chicago Cubs from the Tribune Broadcasting Company ushering in a new era of family control of the franchise for the first time in almost 30 years. It was also a new era for family control for the Ricketts. Joe Ricketts founded T.D. Ameritrade and built the small, private investment firm, into a publicly held banking behemoth. With the fortune in tow, the family bought the Cubs and appointed Noe Ricketts’ son, Tom as Chairman and the rest of his siblings as members of the board. Tom Ricketts and the team he’s assembled have a long-term plan to create a Championship team. But first they have to maximize their short-term profits while wading through the trouble water of media and fan criticism, Chicago politics and the recreation of one of the most beloved Cathedrals of Baseball, the iconic Wrigley Field.
Mike Ozanian: How important is the renovation of Wrigley Field, and the nearby area of Wrigley Field, to get the Cubs to where you want to take them on the field as a Championship caliber team?
Tom Ricketts: It is really important for a couple of reasons. When you talk about what you can do as an owner to help the club win, doing everything you can to generate extra revenues. Because those revenues you bring in dollars you pay your expenses and the balance of your money goes over to the baseball team to get better. It is very important that we do more for the ballpark to raise those revenues and that will be an important part of our financial strength in the future.
MO: What do you think that this total renovation is going to cost?
TR: There are kind of two components. The park itself is north of $350 million, probably closer to $375 million and half of that is just steel, concrete, electrical, plumbing, the things that we need to do to save a 100-year old ballpark for the next 50 years. The other half will be for amenities and doing things for fans that … where we’ve fallen short, where other stadiums offer more and we’ll catch up with what we do for people coming to the game. The other half of the equation is $150, potentially $200, for outside of the park and that’s to develop the plaza and the hotel. So it’s a pretty big economic undertaking.
MO: How much in additional revenue do you think the renovated ballpark can supply the Cubs?
TR: You are talking $30-40 million. And if you look at baseball, the way baseball teams do their finances, you basically pay all of your fixed expenses. Pay all of your staff and salaries and everything else that you have to pay every year. Cover all of your cost of maintenance upkeep and all of that stuff and everything else goes to baseball. So to the extent we have $30 or $40 million of incremental revenue that can come out of this project that goes to baseball.
MO: One of the things that you’ve been hammered on, at, in the press by some reporters is that what you’ve spent on player payroll has gone down a little bit the last few years. But if you look at next year, 2015 there are only two teams with lower guaranteed contracts for all of their player roster, Pittsburgh and Miami. With the potential renovation and you also have a couple of TV deals that are up for renewal over the next several years, you are actually in a great position to build the team from the ground up.
TR: What we realized just a few years ago was that the way we were going about trying to win on the field wasn’t going to work for the long-term. We were spending a very high percentage of our total baseball budget on Major League payroll and not spending as much bringing the right players in. What it did for us is, while there were some good seasons in the previous decade, we didn’t really have a lot to work with when we purchased the team, so we knew we had to rebuild the baseball organization. With respect to the finances, we are going to have a lot of flexibility moving forward. When you think about a system, which his now ranked second or third by most of the major third party sources in baseball, a strong system and financial flexibility on top of it could lead us to create great teams.
MO: Baseball America, in listing prospects, has the Cubs as the only National League team with two players in the top 10, so that flexibility would seem a very valuable …
TR: … And it’s something you understand well that maybe not every fan understands that is really critical. You have to have that core of players that are under control for those first six years that they are in the Major Leagues. You have to have enough of those guys that you can have the resources to add a free agent or add someone from the outside. If you don’t have that kind of internally generated core it’s very, very difficult to put a consistent winner on the field.
MO: As someone who had been a lifelong, diehard Cubs fan, how important was the fact the Cubs haven’t won a World Series since 1908 in your decision to buy the team.
TR: It’s a big part of it. The fact is that the Cubs quest for a World Series is the greatest mission in all of sports and to be even a little part of that, when we deliver that World Series title to Cubs fans, will be incredible.
- Forbes – Chicago Cubs: Baseball’s Next Powerhouse – Includes Interview with Tom Ricketts
- Crane Kenney Talks Wrigley Field, Cubs Finances and Media Rights with Forbes