Umm… Don’t Tell Tom, The Cubs Actually Have Tons of Money
We keep hearing, over and over and over and over again that they Chicago Cubs don’t have money to spend. The well is dry, the financial flexibility is gone, the Cubs are without a dime, they are essentially – poverty-stricken. So while Tom Ricketts was applying for food stamps, he was negotiating the final paragraphs on the new Cubs TV deal with Sinclair that would be an insane financial windfall. Just how big of a windfall?
Sinclair Broadcast Group expects to make between $40 and $50 million a year from Marquee Sports Network, the new Cubs TV deal. That’s just Marquee’s take.
There hasn’t been an official release on what stake Sinclair has, and what the split is, but in similar deals you would discuss something between 75/25% and an 80/20%. Assuming this is true, and this is just a guess based on Sinclair’s expected revenues, the Cubs would earn from a low end of $110 million to a high end of $200 million a season.
To put things in perspective, the Cubs are currently earning around $70 million in TV revenue from the cable and TV network deals they already have in place. That is potentially an $80 to $130 million increase a season. It is important to note, this is an educated guess at what they *could* take in from Marquee.
Cubs Revenue
Without thinking about the Cubs new TV deal, this organization has a ton of money. In 2015, the first year the team made the playoffs under this regime, the Cubs saw their revenues increase nearly $40 million from $302 million to $340 million. In 2016, it escalated almost $100 million to $434 million. In 2017, it increased another $23 million to $457 m.
The Cubs payroll has risen from $139 million to $188 million over that stretch. Then in 2018 the Cubs increased their payroll to around $194 million.
We don’t know the Cubs 2018 revenues, but one can assume that it would fall somewhere near their 2017 number. Maybe a small dip since there was only a single playoff game, but you’re safe to put them in the $440-450 million in revenue range. We also aren’t privy to all the areas the Cubs spend their money. Like how much went into buying the final 5% ownership share from the Tribune Company, or how much the Cubs spent on the rooftops. We do know that the Cubs spent an awful lot on the 1060 Project, renovating Wrigley Field and the surrounding area. That project had a price tag of $575 million, which was paid for over the course of several offseasons and was supplemented through advertising revenue and corporate sponsorship.
Cubs have money, lots and lots of money
Whatever those costs, that doesn’t change the fact that the Cubs have lots and lots of money. There is money hiding in the pillow cases of each and every person with the last name Ricketts here in Chicago, as well as anywhere across the country. Well, that is as long as they adhere to the family contract…
This is my gripe with Tom Ricketts when he stands on stage at a Cubs Convention and says they have no more money to spend. I’m not an idiot. I wasn’t born yesterday. I am, okay and math, and I know that the actual data suggests that the Cubs have lots and lots of money.
I mean, tell me that they have decided to sit this offseason out for business or even baseball purposes. Tell me you looked at the available market and didn’t believe the higher priced guys fit your organizational needs. Tell me that until the TV deal was completed and you had a couple seasons under your belt you didn’t want to overextend yourselves. Tell me something other than the flat out, bold faced lie you’ve been telling anyone with a microphone and a softball question.
Let’s just use 2016’s numbers and add the lowest possible Marquee windfall. In 2016 the Cubs earned $434 million. If they made $110 million from Marquee Sports, that is a total revenue of $544 million. The Cubs have a 2019 payroll of $216 million. The Cubs have a potential $58 million coming off the books in 2020. How in the world would there not be money? Seriously? Are the Ricketts running the Cubs on the worst business model of all time!?
Assuming, making an ass out of you and me…
The only out I can really think of is this. The Los Angeles Dodgers had guesstimated how much additional revenues they would bring in with their TV deal and additional marketing/advertising dollars. Because of nasty and public divorces and infighting, it landed Frank McCourt and the Dodgers in bankruptcy court and MLB wanted to take control of the team.
What ended up happening is an orchestrated sale of the Dodgers to Earvin “Magic” Johnson and the once loved McCourt was left without a wife and organization.
Maybe, and this is a stretch, but maybe Tom Ricketts knew about the family emails that were about to come out? Maybe they wanted to try to keep as low of a profile as possible? Maybe the best way to ensure that the MLB doesn’t become over interested in what’s going on at 1060 W Addison is if the Cubs are great baseball stewards providing the league with good examples of increasing revenues and advertising and building the popularity of a game which is losing its luster with younger demographics?
I don’t know… it’s a guess, but even if they were to come up with some crazy conspiracy that can explain why they aren’t spending, instead of assuming we’re dumb and can’t find the information… well then I’d give them a pass. But right now, it just seems like they are pocketing cash and not really explaining why. That’s fine, but dang Tommy, just be frank with all of us.
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Every team in baseball would get value out of signing Harper. For Ricketts to claim that the Cubs don’t have the money is ridiculous.