Tom Ricketts, the Cubs chairman educated at the University of Chicago and fluent in the bond business, laid out this equation: Renovation + Revenues = World Series.
Ricketts sort of guaranteed a title at Monday’s staged press event on the Wrigley Field concourse announcing the framework of a deal with Mayor Rahm Emanuel and Alderman Tom Tunney. But neither politician joined Ricketts at the podium to support the $500 million neighborhood investment, and the chairman hasn’t put a hard timeline on when those resources will be funneled back into the on-field product.
President of baseball operations Theo Epstein knows it’s not as simple as turning on a faucet. Fueled by revenue sharing and new television money, rivals are crossing off free-options by locking up players with extensions, and the collective bargaining agreement has handcuffed teams that want to invest in the draft and international market.
Sometimes you have to spend when the players are there, even if it’s not a perfect value and everything doesn’t line up on the spreadsheets yet.
“They share projections with us based on different scenarios where we might be, but we need revenues to increase in order for us to execute our baseball plan,” Epstein said before Tuesday’s 4-2 loss to the Texas Rangers. “We expect them to (deliver revenues) and we have a lot of folks on the business side working hard for that. We’re not where we want to be right now in terms of payroll.
“It’s gone down. As we move forward with our baseball plan, eventually it will go back up. Now that in and of itself won’t be a determining factor in our success. We need to generate a stream of young talent through our farm system. But we want to complement that with some aggressiveness in free agency.”
Two weeks into the season, the Cubs are 4-9 and don’t have a closer. They’re making changes at the edges of their roster, claiming Cody Ransom off waivers and designating Brent Lillibridge for assignment while replacing Hisanori Takahashi and Rafael Dolis in the bullpen with Kevin Gregg and Kameron Loe.
Financial flexibility has been a real issue in the final years of Tribune Co. ownership through the highly leveraged $845 million transfer to the Ricketts family in October 2009 (which included a stake in Comcast SportsNet Chicago).
Just look at the five-year snapshot from USA TODAY beginning with Alfonso Soriano’s megadeal in 2007: $100 million; $118 million; $135 million; $147 million; $125 million.
The salary survey has the Cubs at just under $105 million this season, essentially making them a mid-market team while Forbes estimates they lead the league in profits.
“You see where our payroll now is third in the division,” Epstein said. “That’s fine, but it should be first in the division, so this is one of the ways that we’re going to get there.”
While negotiating the renovation details with the City of Chicago and the 44th Ward, Ricketts has called the Tribune payrolls “unsustainable.”
Ricketts has been described as someone who cares deeply about his family’s legacy and wants to protect an iconic ballpark that’s almost 100 years old. His interest in scouting and player development is said to be sincere. But his ownership group still has so much to prove to Cubs fans.
The chairman and president of business operations Crane Kenney have to capitalize on the team’s broadcast rights. The Cubs can opt out of their WGN contract and sign a new contract with the network or another television partner after the 2014 season.
“We’re not where we want to be right now from a revenue standpoint,” Epstein said. “And therefore we’re not where we want to be from a payroll standpoint. So the message is get on board and we’re doing everything we can to improve our picture (and) the landscape here. We need to.”
Epstein is available if the Cubs need a closer for the renovation deal. He has those two World Series titles on his resume and the firsthand knowledge of what a renovated Fenway Park did for the Boston Red Sox. Whether or not he’s not going to community meetings and City Council hearings, he knows this process can get messy and ugly.
“I’ll do anything that we need to get things done,” Epstein said. “My job is to come up with a baseball plan and execute it, but we need the business plan to come through. They know we’re ready, willing and able to do whatever’s necessary to help out – and we do behind the scenes.”