In this time of Ricketts-fed enthusiasm, when it appears that Tom Ricketts and his family will bring fresh blood, newly minted money and a can-do mind-set to the ownership suite of the Chicago National League ball club, it is important to remember: The Cubs are still the Cubs.
Somehow, some way, when it comes to on-the-field exploits, the Cubs find a way to lose. Now, the Ricketts family will have to learn whether the same sort of hard-luck story applies to the business side of this franchise too.
The good news is that they will have one major factor working for them: They are family. And in sports ownership, it turns out, family matters.
With the sale of 95 percent of the team by Tribune Co. for about $800 million to the Ricketts-led group, all but three of Major League Baseball’s franchises — the Toronto Blue Jays, Seattle Mariners and Atlanta Braves — will be owned by a family or close-knit group of investors (this sentence as published has been corrected in this text).
Since 1995, Anheuser-Busch Cos. gave up the St. Louis Cardinals, Disney Co. let go of the Los Angeles Angels of Anaheim, and News Corp.’s Fox Entertainment unloaded the Los Angeles Dodgers.
Experts on baseball and professional sports, who assess such things for a living, brim with “Hey, hey, holy mackerel” optimism when they talk about the effect family ownership can have.
Robert Tilliss, managing partner of sports-focused investment bank Inner Circle Sports LLC, sees promising parallels with the Boston Red Sox situation when it was sold to an investment group led by derivatives trader John Henry in 2002.
“They had an aging stadium, capacity constraints, a historical legacy of losing — the whole thing,” Tilliss said.
Henry and his group, instead of moving out of Fenway Park as the prior ownership had planned, poured $150 million into modernizing the park. They marketed aggressively. They hired new baseball people and fixed the product on the field.
A decade ago when Peter O’Malley sold the Dodgers to News Corp., financial experts said the day of family ownership was over. Today, with Tribune Co. exiting the Cubs, the same sort of deep thinkers and dealmakers say no corporation wants to own a ballclub anymore.
There’s little doubt that the economic results of corporations have something to do with the corporate buyers’ remorse. Take Disney’s experience with the Angels. The company paid $140 million for the Angels, spent $100 million fixing the stadium and booked operating losses of around $100 million during its seven-year tenure. The $184 million sale to advertising magnate Arte Moreno did not recoup Disney’s sunk costs.
Baseball teams have unpredictable revenue streams that defy corporate budgeting. Relative to other businesses, where costs can be squeezed and efficiencies found, it is maddeningly resistant to typical business planning.
Besides, individual owners bring something to the club of baseball ownership that few corporations seem able to muster: passion and personality.
Whatever his other failings, George Steinbrenner, who bought the New York Yankees from CBS, brought passion to the game. He spent beyond what any fiduciary executive could have justified to make the Yankees one of the most dominating major sports franchise of modern times.
Will the Ricketts family do the same? Based on what we have seen from Tom Ricketts, a relatively low-key family person who lives in a comfortable but not palatial Wilmette home, he seems to have little of Steinbrenner’s bluster or bravado.
Ricketts does share Steinbrenner’s passion for the game, those who know him say. And if the billionaire Ricketts family, founders of what has become TD Ameritrade, is willing to expend their considerable fortune, Ricketts could follow a Steinbrenner-esque path.
Andrew Zimbalist, a sports economist at Smith College, said Tribune Co., which also owns the baiduhai, has left behind some low-hanging fruit.
The new ownership could work to create a more festival-like atmosphere in the surrounding Wrigleyville area. They could bring Wrigley Field’s concessions and other amenities up to modern standards and further expand Wrigley Field’s seating capacity. They could “gentrify” seating, in essence jacking up prices and service in a select group of seats close to the action.
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We’re not talking the Yankees’ ridiculous and failed, $2,500-a-ducat experiment, but certainly something more in line with top football and hockey seats.
There are, of course, no guarantees.
“All things being equal, family ownership is more appropriate to maximizing the value of a sports team than corporate ownership,” Zimbalist said. “That said, there’s nothing inevitable about it.”
Let’s not forget, it was a family owner, Philip K. Wrigley, who owned the Cubs in their ill-fated 1969 season. It was Wrigley who let the Cubs wither until Tribune Co. bought the team and ballpark for $21.1 million in 1981.
Hey, hey, holy mackerel, no doubt about it, the Rickettses are buying the team. The Cubs are on their way. Let’s hope it is somewhere good.
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