Tanaka fallout: Cubs facing long-term questions about future

Tanaka fallout: Cubs facing long-term questions about future
January 23, 2014, 5:45 pm
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Where do Theo and Co. go from here? (AP Photo)

Why can’t the Cubs build a good farm system while also putting out a decent big-league product?

Team officials didn’t have a great answer when a fan asked that question during last weekend’s Cubs Convention. That disconnect has left the entire industry – players, agents, scouts, executives – wondering what’s going on at Clark and Addison. 

[MORE: Cubs hit another roadblock in dispute with Wrigley rooftops]

The bad press snowballed again on Wednesday, as the Cubs lost the Masahiro Tanaka sweepstakes and got into another turf battle with the rooftop owners, leaving the $500 million Wrigleyville project in limbo.

Unless you’re the New York Yankees, it’s hard to justify giving a pitcher with zero major-league experience a seven-year, $155 million contract – with an opt-out after four seasons – and paying the $20 million release fee to his Japanese club.

[RELATED: Yankees blow away Cubs in Tanaka sweepstakes]

But the Cubs making a final bid for Tanaka at six years, $120 million won’t turn down the simmering frustration inside the organization or signal that they’re acting like a big-market franchise again.

The Ricketts family purchased the team in a complicated, highly leveraged $845 million deal (which also included a stake in Comcast SportsNet Chicago). Chairman Tom Ricketts acknowledged the debt “is a piece of the puzzle, but it’s not as big a piece of the puzzle as people think,” stressing Sam Zell’s Tribune Co. demanded those restrictive sale conditions from anyone who bought the team in 2009.

There would be a financial reckoning. A payroll that climbed to $146.9 million on Opening Day 2010 had sunk to $100.9 million by the end of the 2013 season, according to figures obtained by the Associated Press.

[ALSO: David Ortiz believes Theo will bring a World Series to Cubs]

Inside a ballroom at the Sheraton Chicago Hotel & Towers last Saturday, president of business operations Crane Kenney told the convention audience that the Cubs produced the fifth-highest revenues in baseball last year (while losing 96 games and finishing in last place in the National League Central).

Their final payroll checked in at No. 15, trailing the crosstown White Sox ($116.7 million) and division rivals like the St. Louis Cardinals ($119.6 million) and Cincinnati Reds ($116.1 million).

Industry officials have confirmed the Forbes rankings that identified the Cubs as baseball’s most profitable team in 2012, part of an analysis that assessed the franchise value at $1 billion.

No one is arguing the Cubs should have signed Albert Pujols, but there is a middle ground between the $240 million megadeal and loading up on guys who’ve been DFA’d. These spending restrictions influence every decision made by president of baseball operations Theo Epstein and general manager Jed Hoyer.

It’s easy to say the Cubs will spend when “they’re ready to win” or “on the right guys.” Or ask the wrong questions, like: Who would you spend the money on anyway?

The Cubs could have bought some credibility with big-time free agents who make sense and want to play for a winner now, like Tanaka and Anibal Sanchez. They could have bought some protection for young core players Anthony Rizzo and Starlin Castro. They could have built up some trust in the Jeff Samardzija extension talks and created some goodwill/leverage in negotiations with City Hall, the rooftop owners and network executives.

[RELATED: Bill Mueller uses '04 Red Sox to send message to Cubs prospects]

Who knows if this front office is as good as advertised after firing manager Dale Sveum, signing Edwin Jackson to that $52 million contract and losing 197 games across the past two seasons. 

But if you believe this endorsement from board member Laura Ricketts – “We have the right guys. If you sit down with Theo and Jed, there’s no one better in baseball.” – wouldn’t you want them to make some bigger bets and not just wait for the Baseball America prospect rankings to come out?

Maybe, as one major-league official wondered, the super-agent does just sit all winter in the Boras Corp. headquarters in Newport Beach, Calif., trying to think up zingers for every team. But Scott Boras definitely struck a nerve inside the Clark Street headquarters when he alluded to the Ricketts family trust with his “Meet the Parents” and “All-Day Sucker” one-liners during his media scrums at the GM/winter meetings.

[RELATED: Theo defends Cubs ownership]

This economic climate impacts every negotiation and shapes how Epstein and Hoyer value each roster spot.

Cuban outfielder Yoenis Cespedes would have been a solid Year 1 investment, but the Oakland A’s offered the same amount of money as the Cubs – $36 million – over four years instead of six.

Maybe the Cubs wouldn’t have planned their entire winter around Tanaka if the Los Angeles Dodgers hadn’t blown them away with a $25.7 million posting fee for Hyun-Jin Ryu last offseason.

Giving Jason Grilli an extra $1 million last winter could have given the Cubs separation, but the Pittsburgh Pirates got an All-Star closer with a two-year, $6.75 million deal.

There was smoke when the Cubs traded clubhouse leader David DeJesus to the Washington Nationals for a dollar last August, part of the financial gymnastics to save about $2.5 million and get out from under a 2014 buyout.

The thing is, the resources should “be there” when new revenues start flowing from a renovated Wrigley Field and new television deals. Maybe the Cubs will hit the jackpot with an elite farm system headlined by Javier Baez, Kris Bryant and Albert Almora.

[MORE -- Cubs Prospect Watch: Baez, Soler, Vizcaino]

In the end, Ricketts could still win big, enjoying the ultimate told-you-so moment in a champagne-soaked clubhouse with a cigar in one hand and a trophy in another.

Even the fan at Cubs Convention who just wrote an $11,000 check for season tickets and wondered how they could justify those prices softened his criticism by telling Tom, Laura and Todd Ricketts: “I know you’re going to take us to the World Series.”

Associates describe Tom Ricketts as a glue guy in his family, someone who cares about their legacy in Chicago. He has shown a genuine interest in scouting and player development, visiting minor-league affiliates and impressing staffers by putting a face to ownership, instead of Tribune Tower looming over the entire organization.

The learning curve is steep for someone who came into this lacking experience in professional sports and Chicago machine politics. Epstein defended ownership by saying the Ricketts family is willing to take the heat now, because they plan to own the team for generations.

[RELATED: No guarantees for WGN as Cubs look at next TV deal]

“Any of the stories you hear about the financial side, we understand that cold,” Ricketts said. “We know where we are and we know it’s not limiting the team. And we know over time it’s going to get stronger. I think one of the things we also have to deal with is we have a lot of kind of extraordinary expenses other teams don’t have.

“We’re the highest-taxed team in baseball. We have to deal with the fact that we have people across the street that sell our product and fight against us for ticket sales. We also have fairly old television contracts.

“Anyone that follows the business of the game knows that the teams that are spending the most are all the teams that have just gotten brand-new TV contracts. So we still have a very, very strong baseball budget. It’s not limiting us.”

Kenney pointed out that no team in baseball has spent more combined on the draft and international amateur talent across the last four years (though a new collective bargaining agreement has severely restricted investments in those areas, and some of that comes from drafting near the top of the first round).

The Cubs have also built a $6 million academy in the Dominican Republic. Next month they will have a ribbon-cutting ceremony for the new complex in Mesa, Ariz., which was funded with public money – $84 million for baseball facilities and another $15 million for infrastructure – after the Cubs threatened to move their spring-training base to Naples, Fla.

[MORE: Samardzija headlines arbitration cases for Cubs]

Whether or not this is “doing it the right way,” the Cubs will keep scouting Perfect Game showcases and college tournaments. They’ll treat the draft like their Super Bowl. They’ll try to coach ‘em up with those “Cubs Way” manuals.

“That’s a constant. That’s not a variable,” Epstein said. “There are other elements of the baseball plan that will be dictated somewhat by what our payroll is – $180 million teams operate differently than a $90 million team. That’s just a way of life. We’ll be prepared regardless.

“But I think, obviously, as the Chicago Cubs – and with the great plans that our business side has laid out and has started to execute – I feel like we should certainly be, eventually, at the table with the other heavy hitters in the game.”