Cubs: Crane Kenney stays in the picture with Wrigley plans/media deals

Cubs: Crane Kenney stays in the picture with Wrigley plans/media deals
June 10, 2014, 5:45 pm
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While trying to manage the Wrigley Field message, Crane Kenney revealed his contract runs through 2019, keeping the Cubs president of business operations in power through a make-or-break point in the franchise’s history.

Given his alliance with chairman Tom Ricketts, Kenney’s long-term future wasn’t in doubt. But a recent appearance on WSCR-AM 670 confirmed the extension rumors that had been floating around for months.

It roughly lines up with the club’s TV free agency and perhaps the completion of the $575 million Wrigleyville development. It keeps Kenney in the middle of a three-ring circus featuring angry rooftop owners, annoyed City Hall officials and a frustrated baseball club trying to get to the next level.

“Thank God it’s not a popularity contest with the Ricketts,” Kenney said on The Score. “I know where I stand there. Tom just extended my contract through 2019. So we’re locked in this thing for the long-term to get it done.”

[MORE: Wrigley Watch -- Cubs wait for pitch to Landmarks Commission]

Kenney did a TV/radio blitz after Mayor Rahm Emanuel criticized the rollout of the expanded renovation plan, and held a stadium club news conference last week announcing a “game-changing partnership” with CBS Radio Chicago, the same day Theo Epstein’s front office had its “Super Bowl,” selecting Indiana catcher Kyle Schwarber with the No. 4 overall pick in the draft.

Over the years, Kenney’s had an uneasy relationship with the Chicago media – the Tribune timed one takedown for the day of Epstein’s first Wrigley Field press conference in October 2011 – as well as the organization’s baseball decision-makers. Part of that is the inevitable tension within any professional sports team, what happens when competitive people work for an iconic franchise in a high-profile industry.

Power Plays

Kenney, a Notre Dame graduate with a Michigan law degree, is now in his 21st season in the organization, rising through Tribune Tower and outlasting Cubs executives Andy MacPhail, John McDonough and Jim Hendry.

The Cubs saw these issues coming. Sam Zell’s Tribune Co. put the team up for sale on Opening Day 2007. The Ricketts family finalized the $845 million leveraged partnership – which included a stake in Comcast SportsNet Chicago – in October 2009.

The most recent Forbes survey valued the Cubs at $1.2 billion. Officials inside and outside the organization have tried to explain the relationship between Ricketts and Kenney.

Ricketts clearly developed a bond with Kenney as they engineered a complicated sale. The family may feel indebted after beating out a field that included Madison Dearborn Partners chairman John Canning Jr. and Dallas Mavericks owner Mark Cuban (who had no shot at getting the seal of approval from commissioner Bud Selig and Major League Baseball’s inner circle).

A family that had no experience in professional sports needed someone to guide them through the North Side maze while also giving them a crash course in the business of baseball and cable TV economics.

[ALSO: Cubs leaving WGN after making radio deal with CBS]

Kenney is willing to play the villain, threatening to move spring training to Naples, Fla., when the Cubs wanted a new complex in Mesa, Ariz.

Even Kenney’s detractors admit he’s extremely clever, with strong survival skills and sharp political instincts, always coming up with big-picture ideas about possible moneymakers. Kenney says the team generated the fifth-highest revenues in the majors last season.

Bricks and Ivy

Emanuel, who will be up for re-election next year, wants some good publicity, surrounded by workers wearing hard hats and holding shovels. Inside the clubhouse, Cubs players are skeptical about a July groundbreaking, because they’ve heard this before.

The Cubs are waiting to get another meeting with the Chicago Landmarks Commission and make a pitch without the expanded bullpen doors, which would have altered the stadium’s protected bricks-and-ivy elements.

Kenney recently explained the potential delay to the Wrigley Field renovation on CSN Chicago’s “SportsTalk Live.”

“The responsibility is ours to make sure the city always is aware of what we’re doing,” Kenney said. “We’ve worked together for four or five months on this plan. The central focus was the outfield expansion, the seating expansion, the new terraces and the signage. We did let them know we were moving the bullpens underneath, which really isn’t an issue. The bullpens themselves are not a protected feature.

“The summer before, we actually enlarged the doors in the ivy. … In our drawings, we had that included. But for whatever reason, it wasn’t understood by the city that was happening, and that falls on us. If they’re not fully aware of all the changes, then we’ve got to do a better job of informing them. And if they want to take another look at it, of course, we’re prepared to do it.”

The Cubs don’t sound interested in giving it another shot with the rooftop owners, preparing for what will be a bitter legal fight.

One official wondered if a different voice could have changed the tone in the negotiations, considering Kenney helped construct the 20-year, revenue-sharing contract, a detail repeatedly mentioned by a Wrigleyville Rooftop Association spokesman.

[UNVEILED: See the complete Wrigley Field rooftop contract]

 

Ricketts and Kenney have acknowledged that under Tribune ownership, the Cubs didn’t have either the foresight or the wherewithal to buy up all the rooftop buildings before the business exploded, losing the chance to gain more control over the neighborhood.

One insider described the Disney World vision, where the Cubs would create their own entertainment zone, grabbing as many dollars as possible by selling food, beer and souvenirs to pre- and postgame crowds, potentially phasing out local vendors.

“We have an ambitious agenda,” Kenney said on The Score. “We have in some ways 30 years of catching up to do. There were a lot of opportunities that were not taken. We are challenging some things. We’re challenging the status quo with the rooftops. That’s not popular in some places. We’re challenging the status quo with our media-rights partners.”

The WGN Breakup

Kenney looked to the future while ending a relationship with WGN Radio that stretched back almost 90 years.

Beginning in 2015, Cubs games can be heard on WBBM-AM 780, the city’s top billing station, as part of a seven-year marketing deal that features a strong cash component and a 50/50 joint venture to produce concerts. The CBS network here includes The Score, the city’s No. 1 sports-talk outlet, as well as US 99.5, the big station for country music.

“Nobody in Chicago has access to more talent and the top artists than CBS Radio,” Kenney said.

WGN-AM 720 opted out of its contract after a two-year stretch that saw the Cubs lose 197 games and declined to match the CBS deal. That didn’t stop WGN Radio president Jimmy de Castro from blasting the Cubs, saying the contract didn’t make any economic sense.

While appearing on The Game 87.7 – one of his bets on the future of radio – de Castro revealed some Cubs games got no radio ratings on the meter system last year. He identified three major advertisers – Chevrolet, Old Style, Blue Cross Blue Shield – that had pulled out this season.

Outlining some of the ways WGN tried to keep the Cubs, de Castro mentioned: a profit-sharing arrangement similar to one made with the Blackhawks; an equity ownership in the station; and selling airtime for $1 a game.

“To be very clear, we lose millions of dollars – today, this week, last week, next week, the week after – in bringing Cubs baseball to our fans,” de Castro told “Kap and Haugh.” “Millions of dollars. And we were prepared to continue to lose millions of dollars. But not (that) number of millions of dollars.”

Cubs TV Everywhere?

During the negotiations, Kenney remembered a meeting in which CBS Radio president Dan Mason wondered “why Tony Campana wasn’t on the team any longer,” saying the media company had bought into the franchise’s business/baseball plans.

Mason and Rod Zimmerman – another senior CBS executive and the market manager for Chicago – held up personalized white pinstriped jerseys at the announcement. Zimmerman delivered this memorable line: “Exclusive, marquee, oceanfront property radio content like this is very hard to find.”

Ideally, someday soon the Cubs will be introducing big free agents at stadium club news conferences. Epstein will be standing at the podium, smiling for the cameras. Those jerseys won’t say “CBS RADIO 780” across the back.

Kenney got involved in the spending spree that fueled division titles in 2007 and 2008, as well as the austerity program that will lead to what now looks like a fifth-place finish for the fifth consecutive year.

A payroll nearing $147 million on Opening Day 2010 has been slashed to around $75 million for this season’s on-field product, when you subtract the Alfonso Soriano subsidy paid to the New York Yankees.

This is all part of the franchise’s financial unwinding, what Epstein’s front office hopes will be a return to big-market status, and the payoff could be huge when combined with an elite farm system.

The Cubs have already opted out of their TV deal, making this the final guaranteed season on WGN, though they can’t start their own cable network until 2020.

WGN America is planning to drop Chicago sports. Tribune CEO Peter Liguori sounded like de Castro last month at a media conference in New York.

[RELATED: Cubs release updated renderings of remodeled Wrigley Field]

Crain’s Chicago Business quoted Liguori as saying: “If the Cubs continue on this path to virtual irrelevancy, it's really not going to matter.”

Kenney responded to that “tongue-in-cheek” comment on “SportsTalk Live,” downplaying concerns about the product or a potential bubble bursting.

“They’ve had a stated goal of moving from a superstation to a basic cable channel,” Kenney said. “And with that, they will lose their sports. I think that sports rights are very valuable. I think the marketplace says sports rights are valuable.

“Peter has a different view in the way he wants to take this business, having come from Fox and launching the FX channel and relying on original content. And certainly that’s their prerogative to do that. We love the place we’re sitting in with our sports rights.”

The Cubs need a megadeal, though all the Wrigleyville drama should be a cautionary tale: Nothing comes easy.

Also pay attention to the $8 billion-plus contract between the Los Angeles Dodgers and Time Warner Cable, which has reportedly shut out 70 percent of the local market as SportsNet LA struggles to get on a basic tier.

But whatever happens next, Kenney will be in the middle of it all. During his news-making appearance on The Score, the Cubs executive didn’t sound worried about perceptions.

“Honestly, I don’t pay too much attention to the critics,” he said. “Maybe I just wasn’t born with the gene to care too much. We do the best thing we can for the team every day.”