The Cubs Unwillingness to Spend Should Bother You, But Not for the Reasons You May Think
This has been a very strange offseason for the Chicago Cubs. With expectations that a free agent like Bryce Harper would be a Cub this winter, it appears the team is settling to sign players to minor league deals, and they can’t “afford” mid-level relievers.
This is not how the script was supposed to go for the Cubs, at least per their fans. The pictures Kris Bryant and his wife Jess shared from New Years was supposed to be of the new teammates, and not just mates from back in the day. But the lead continues to be how the Cubs can’t afford to spend big, and now apparently they can’t afford to spend small either.
The plain fact of the matter is, the organization does absolutely have money. They have more money than Scrooge McDuck, and the Ricketts can be seen taking trips to the coffers for afternoon swims.
MLB revenues had reached yet another all-time high in 2018, high-fiving the $10.3 billion mark. That number doesn’t include the $2.58 billion coming from the BAMTech sale to Disney, and there is a $5.1 billion extension with FOX and a slew of cash coming from a streaming deal with DAZN. Traditionally those funds are split equally between all 30 teams, and will add more than a quarter billion to all team’s bank accounts.
Top this with the prospect of a new Cubs TV deal, which will add more than a billion dollars to the organization, and the money is there.
Knowing the money is there is only one reason fans should be upset. It is true that the Cubs are allocating money to other areas of the organization, but it is the product on the field that we want to see improved upon. But, Wrigley’s renovations weren’t cheap, research and development of a TV network costs money. The Cubs also have multiple coaches on the payroll that are no longer employed by the team, and of course there are costs involved in ensuring the organization’s minor league teams, and baseball programs in Latin American countries are the highest quality. So while there is still a lot of money in the coffers, perhaps the business-side of the ball has caused them to squeeze pennies on the player payroll side.
But the team just having the money isn’t the main reason fans should feel slighted. I mean, the Cubs are allowed to spend the money however they see fit, and just because fans want something doesn’t mean its best for the team. If the team did what the fans wanted, then guys like Albert Pujols and Prince Fielder would have been Cubs, and Anthony Rizzo wouldn’t.
Here is what should start to irk fans.
The Cubs had the highest average ticket price in 2018, coming in at $58.57 per seat. The Cubs averaged 38,793 per home game in 2018, which means, via ticket revenue alone, they brought in $184 million in gate revenue. They received another estimated $84 million in cable and terrestrial TV revenues as well. They received $50 million from the BAMTech purchase, and will likely of had total revenues over $500 million in 2018. All of this with a slip in attendance for the second consecutive season.
Even with monies allocated to other areas of the organization, the Cubs still will bring in roughly $170 million more than they did in just 2015, and those revenues should be set to skyrocket higher in the 2020 season.
In the 2015 season, the Cubs had a payroll of $133 million (rounded up). This represented about 40% of the Cubs overall revenue. In 2019 the Cubs have an estimated payroll of $214 million (so they have certainly spent money), but represents only a 42% of their revenues.
In contrast, the Cubs allocated 52% of their revenues to payroll in 2018 (using Spotrac’s totals). This would mean, in an offseason which has the most promising free agent class, perhaps ever, the Cubs have reduced their allocation of payroll dollars by 10%.
Now, of course teams will fluctuate total payrolls year after year, and sure there is a luxury tax, but that isn’t a deterrent for the Cubs. Don’t believe me, take it from Theo Epstein.
“The CBT threshold is not dictating any of our actions or inaction this winter at all,” Epstein said in a recent interview with Bruce Levine on 670-AM The Score. “We’re not governed by that.”
This is absolutely the Cubs effectively choosing to not spend, or are playing the role of a stealthy predator while they hunt their target.
Baseball revenues have changed quite a bit over the past 20 years. A game which most of their revenues came from the gates, now comes in from advertisers, TV deals, and large marketing contracts. MLB saw a drop in attendance in 2018, yet still managed to increase revenues – and that doesn’t even include the $2.58 billion from BAMTech. Baseball has found a way to earn, even if you aren’t there, and teams are restructuring their organizations around this shift. The Detroit Tigers were able to pay the entirety of their payroll on only money brought in through revenue share and TV deals.
This is certainly strange times.
Just know, the Cubs have the money. Whether they actively choose to spend it has yet to be seen. But when there is roughly $184 million coming in directly from fans, wouldn’t you want them to start spending more?
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Although great information, this article is ridiculous. The Cubs under Theo have never been one not to spend money. Being upset that they have not spent it yet this offseason is a little immature.