Cubs lean on ‘need to generate revenue’ theme

Posted by Ed Sherman  at 3/22/2010 2:48 AM CDT on Chicago Business

Have you noticed a trend, Cubs fans?

Every time, the Cubs talk about doing something to push the envelope a bit on the marketing front, it comes with the not-so-subtle reminder that this is being done for our benefit, i.e., putting a winning team on the field.

While talking to Cubs marketing chief, Wally Hayward, last week about the proposed new Toyota sign in left field, which figures to upset a few folks, he returned to what is a familiar talking point several times.

“The bottom line is that we have to come up with innovative ways to generate revenue to put the best possible team on the field,” Mr. Hayward said.

Another variation on that theme comes from Cubs President Crane Kenney reminding everyone that Tom Ricketts and his siblings are committed to pouring all the profits back into the team. Recently, he was quoted in the Sun-Times:

“This is a zero-sum game. The Ricketts have said we are not putting a penny in our pockets. All of the profits, every dollar, will be invested in either the facilities or the team. Every time we stage a concert or hockey game or a football game or bring in a new marketing partner or grow the revenue of the business, it directly influences the product on the field. Ideally, with every effort we make, we are directly improving our chances of winning.”

Then there was Mr. Ricketts himself talking at the team convention about why the Cubs raised the prices on some tickets.

“If we’re going to compete with the bigger teams in the league, if we’re going to try to compete for talent with the Red Sox or the Yankees, we’re going to have to have some financial flexibility,” Mr. Ricketts said.

It all sounds like code for: We’re going to do some things you might not like, but you want to see a World Series, don’t you?

This approach has been the mantra since Mr. Ricketts took over the team in October. It’s a logical PR vehicle, given that his family wants to win over fans. After all, what else are they supposed to say?

The risk, though, is that it will sound like a broken record and fans will get tired of hearing it, if they haven’t already.

Now there are certain realities here. The Cubs play in a ballpark that severely limits revenue opportunities. According to Marc Ganis, the president of SportsCorp, a Chicago-based sports marketing firm, all the signage at Yankee Stadium nets the team in the neighborhood of $120 million.

The Cubs probably wouldn’t go that high, but you’ve got to figure they could push the $80 million-$100 million range if they decided to decorate Wrigley Field with corporate signage and replaced the vintage scoreboard with a Jumbotron. That kind of cash could go a long way to keeping ticket prices in line and/or paying salaries.

Meanwhile, the Cubs have to jump through hoops and endure all sorts of hand-wringing to put up a sign in the outfield that will net them in the range of $2 million to $2.5 million.

“There isn’t another team that faces the restrictions the Cubs do,” Mr. Ganis said.

Also, Mr. Hayward notes the Cubs are the only team in baseball that doesn’t receive public funding for the ballpark. That means the bills for maintenance and the  improvements to the ballpark, some of which already will be on display on opening day, all come of the owners’ pockets.

“People need to remember that,” Mr. Hayward said.

Yes, we do. The Cubs definitely have certain challenges to overcome, especially with a player payroll in the $140-million range, one of the highest in baseball.

Of course, it would help if players like Alfonso Soriano, Carlos Zambrano and Kosuke Fukudome played up to the expectations of their salaries (a combined $48 million in 2009). The lesson: It’s about who you give the money to, not the amount.

Regardless, nobody can accuse the Cubs of being cheap these days. To spend money, you’ve got to make money.

As we’ve seen already, the new regime is committed to finding new ways to pull more dollars out of Wrigley Field. And they’ve barely begun. Big plans are in store by 2014, the 100th anniversary of the ballpark.

While Mr. Ricketts and his crew stress the importance of maintaining the integrity of Wrigley Field, some of the changes still will be difficult to stomach for traditionalists. The Tribune’s Pulitzer Prize-winning architecture critic Blair Kamin wrote a scathing assessment of the new Toyota sign.

Calling it a “wrong turn,” Mr. Kamin said, “It would be as out of tune with Wrigley as last year’s free-agent bust, Milton Bradley, was out of sync in the Cubs’ clubhouse.”

The Cubs obviously beg to differ. They maintain the sign is tasteful, and that it and other future changes are essential if you want that closer, starting pitcher, rightfielder, etc.

Cubs fans are passionate, but thanks to more than 100 years since the last title, they’ve become cynical too. Patience left town a long time ago. Mr. Kamin speaks for many of them when he wrote later in his piece: “The team’s perennial cry that it desperately needs cash is beginning to wear thin.”

The new regime should reconcile themselves to the fact that some necessary moves aren’t going to be popular. It’s 2010, not 1960, and different economic rules apply. Frankly, the Cubs can’t continue to leave money on the table.

The Cubs might simply want to apply the reasoning we all use occasionally with our kids: “You know what? That’s just the way it is.”

After all, it may be “Year 1″ for Mr. Ricketts and his siblings, as the marketing slogan says. But it is going on year 102 since 1908.

http://www.chicagobusiness.com



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