Showing posts with label finances. Show all posts
Showing posts with label finances. Show all posts

March 19, 2021

THE URGENCY OF HURLING

 New team President Jed Hoyer spoke to NBC Chicago Sports. 

“When you talk about urgency of this team, and it’s been stated,” team president Hoyer said, referencing a roster full of players on the one-year contracts. “We need to play well out of the gate. That doesn’t mean we have to play well the first two weeks. But when you think about the first half of the season, we need to put ourselves in position to be a buyer, to be a team that’s competing. 

"That’s probably a slightly different feeling than you might have had two or three years ago when all these guys are [are much further from free agency],” said Hoyer, who’s optimistic he’ll have a lot of payroll flexibility in July, depending on attendance allowances as COVID-19 restrictions presumably are lifted gradually into the summer. 

There is no way around the Truth: this is the last season for "The Core," the foundation players who won the championship. It really is the last gasp for the Cubs to try to win another championship before sinking in the total rebuild muck.

But this talk makes some fans hurl. The Yu Darvish trade was an early White Flag deal in which the Cubs could never recover. Marquee not showing live Cub spring training games is a cheap farce in a year public relations is needed to bring back fans to baseball.

The urgency to sign pitchers like Shelby Miller and Jake Arrieta past their primes is an indication of the one-and-done front office mentality. The starting rotation is a mess. The bullpen is also a mess. The farm system is a disaster. 

The only bright side is that most of the NL Central had their own talent fire sales due to financial pressures from 2020. Only the Cardinals made a splash to become the front runner in a weak division. The Cubs 2021 plan is hoping other teams stumble and their old veterans somehow find some magic to outperform expectations. Expectations that are very low.

With as many as 18 players on the Cubs’ projected 26-man Opening Day roster are players expected to be in walk years (either free agents at the end of the year or facing club-option decisions for 2022), the do-or-die mentality seems to be not there. There is such little local media coverage one wonders if the pandemic has sapped all interest in the team.

One can see now why Theo Epstein bailed on his last contract year to not oversee this pending dumpster fire. With ownership claiming biblical losses (of their own bad business practices), the Cubs are no longer the lovable losers but a failed dynasty. The team lacks an identity. It also lacks talent. It woefully lacks depth. 2021 is shaping up as a season to forget before it starts.

March 3, 2021

ANOTHER LISTLESS SPRING

 The Cubs start another season with very little competition for roster spots.

The Cubs went into the winter hibernation in early fire sale mode. The Yu Darvish salary dump and the owners cry of "biblical losses" due to the pandemic were not greatly received by Cub fans. The Atlanta Braves, the only publicly held team, reported a 2020 operating loss of $54 million.  The league claims $2.8 billion in losses (if Braves are average team, the league claim is double). 

A round of journeymen signings leads the Cubs who are really on the last year of the championship core window (which has effectively closed). Bringing back Jake Arrieta after two below average years is not a solution to a rotation that lost 4/5ths of last year's opening day starters. 

Barring any injury, this appears to be your Opening Day roster:


Starting Rotation: Hendricks, Davies, Arrieta, Mills, Williams

Catchers: Contreras, Romine

Infielders: Rizzo (1b), Hoerner (2b/ss), Bote (2b/3b), Baex (ss), Bryant (3b)

Outfielders: Happ, Heyward, Pederson, Marisnick

Bullpen: Kimbrel (closer), Workman, Winkler, Ryan, Wick, Wieck, Chafin, Tempera, Alzolay

Not a dominating team with any real depth.

The bullpen is basically last year's hit and miss crew. Kimbrel is still the closer by default since Jeffries left for free agency. Out of the mix are two of last year's spot starters: Alzolay and Rea.

The only bright spot is that only the Cardinals seemed to have attempted to improve their roster with the Arenaldo trade. The rest of the division have been salary cutting veterans. But it will be another long 2020 type season as the pandemic starts its fourth wave right around Opening Day.


January 3, 2020

THE FALL OUT

The house of cards that is our Chicago Cubs seems to falling down after another disappointing end to a season. The 2016 championship seems to be a distant memory. The idea of dynasty seems to be fantasy.

But nothing compared to the Ricketts family's fantasy that the Cubs were a money making ATM machine.

With Maddon's release, the Cubs have moved on to David Ross. But many other things have moved on from the Cubs.

Maddon's Post, a restaurant in the new Ricketts outside-the-park commercial development, abruptly closed after seven months. This is the third restaurant/bar in Ricketts' properties to have closed in the past year. The problem must be that the Ricketts overdeveloped the area, put in high lease rentals, and the businesses could not be profitable.

Also moving on is local over-the-air Cubs games. WGN will no longer broadcast any Chicago sports teams (it began in 1924). The Cubs Marquee Network launches in approximately 50 days. But it has no on-air talent, it has de minis cable contracts in the metro area, and no programming announcements to fill 24 hours/day. Kasper and Deshaies contracts expired at the end of the 2019 season. Hughes and Comer radio contracts may expire at the end of 2020.

The news broke as the season ended that the Ricketts family overspent on the Wrigley renovations by $600 million. That was not unexpected considering they decided to phase the work over three years instead of one intense project. The fact that the Ricketts overspent for the team (by an estimated $500 million) and doubled the cost on Wrigley, the Cubs operations are not generating enough revenue to off-set those financial hurdles.

The fall out from these financial stumbles is clear in that Theo has been handcuffed in spending. He can barely sign dual contracts for minor league reclamation projects. The Cubs are already over the luxury tax threshold by $10-18 million. It means the team must shed current star players in order to get into the business side's budget figures. The rest of the league knows the Cubs want to shed payroll so the trade market will not be as generous as Theo would want it to be to fill the depth and holes in the current roster.

There are problems with the rotation, the bullpen, lead off hitter, and center field that have no solutions in the minor leagues. Free agency and money was to fix roster problems during this "championship window" but Theo overspent to get the 2016 championship and now dead money deals have painted the team into a corner.

It appears the team revenue and finances will not allow the Cubs to be free spenders to acquire talent. They will have to operate as a small market team with the debt burden of a major franchise. If the Cubs' opening roster is the same as 2019, how are fans supposed to react? Three years of underperforming is not a oddity but a trend.

The Cubs were more popular when they were the Lovable Losers. Once the championship happened, die hard fans got their once-in-a-lifetime thrill. Now, many do not want to spend premium ticket and concession prices for a bad team.

February 20, 2014

CLUELESS IN CHICAGO

Sports reporters cannot write proper financial stories because all they do is parrot what owners claim. It is quite frustrating reading an article that is so full of nonsense and b.s. that even market hogs would vomit.

ESPN Chicago has another article quoting Cubs owner Tom Ricketts and his crusade to get everything he wants from the city and rooftop owners. Everything is couched in a nuclear meltdown threat that if does not get his new outfield signs, the whole $500 million development project will come to a grinding halt.

Ricketts comments should have drawn "are you stupid?" follow up questions from the reporter. 


For example:


"Ultimately you have to have control of your own outfield."  Yeah - - -  you already do . . . you sell the most expensive bleacher seats in baseball!

"We can't live for the next 100 years with this kind of situation." But the rooftop deal you knew about, a binding contract, expires in 10 years - - -  not 100!

"If we can't grind out these last few steps (for a rooftop deal), I don't know what's going to happen." It is simple: you DON'T have a new deal and you have to LIVE with the old one!

"We've stepped up the maintenance in the park in hopes this will all work out. That said, if you're going to go out and scrape up another $300-$500 million, you have to know what you're investing in." But that other money is NOT for the ball park but your grand overdeveloped real estate project across the street! (And it seems the bankers who may loan the Ricketts money for the project will not approve the loan without more revenue - - - for which Ricketts has fixated on new signage. This seems to reinforce the notion that the Ricketts don't have the money to move forward on any project without the new signage revenue, reportedly to be around $10 million/year. )

"We all have an incentive to get it done," Ricketts said. "Hopefully all those incentives add up to getting something that works." The rooftop deal was working for 10 years!  What incentive is there for a rooftop owner to have his view blocked and ruin his business? None.

The article also states that the Cubs believe, as private owners of the team and park, that they should be able to do what they want, EXCEPT every private business in America can't do ANYTHING they want with their property because they all are subject to zoning, health, safety and this case landmark and private contracts! If you talk to any local Chicago businessman he or she will tell you that it is bureaucratic nightmare to operate, maintain or expand a business in the city.

Ricketts concluded by saying that  "You can't just pretend Wrigley Field is another ballpark that's built out in some suburb that no one cares about." Because people and fans have a connection to an iconic old ball park does not grant the owner a blanket license to build a massive hotel-commercial-retail (including new taverns and an entertainment plaza) and parking structure. He has constantly said that he is not running a museum; that the ball park must change - - - which dilutes the connection many older fans have to Wrigley Field.

The Cubs don't need a "new deal" with the rooftop owners if the Cubs publicly stated view is that once the city approved the new signage, the team can go forward and build them. So the Cubs have hid real legal concerns from their public relations. The rooftops are the villain to help distract the public from the slow, tedious and bad rebuilding program that has left the Cubs with horrible team after horrible team.

December 28, 2013

THE SET-UP FOR FAILURE

The Cubs have not toned back the media stories about the Cubs going "all in" to win the Tanaka sweepstakes.

Yes, the Cubs are one of 8 teams who will try to sign the coveted Japanese pitcher.

And several of those teams have large, profitable new television contracts which inflates their payrolls dramatically (i.e. the Mariners, Dodgers, Angels and Yankees).

But the notion that the Cubs "won't be outbid" for Tanaka seems ridiculous. It is not a question of what the amount of money the Cubs will bid, but it is also where Tanaka wants to pitch (most likely to a contender).

Cynical fans also think that there is more "talk" than action in recent years from the front office. They say they made bids for start free agents like A. Sanchez, but in truth, those bids were much lower than the team that signed him. A low ball bid with almost zero chance of acceptance is really not a qualified, good faith effort. Many fans believe that the Cubs are not going to win in 2014 or 2015. So why would a team with no chance of winning try to sign an "ace" pitcher  and basically "waste" 2 or 3 years of salary in a losing effort? That does not seem feasible if the Cubs continue to pull in the purse strings in order to pay the team's massive debt service and fund Ricketts massive real estate development project.

Some believe that Epstein may be allowed to make a 5 year/$55 million Edwin Jackson style bid (which in reality would be a $75 million investment with the posting fee), but that will not come close to the projected $100 million asking price. The "we tried" to sign him excuse may help in PR, but does not help shore up fading trust with the fan base.

With the mountain of pitchers the Cubs have drafted in the last two years, and none making waves in national scouting service reports, the discussion about the need to sign free agents or trade for quality major league ready arms calls into question the whole rebuilding plan.

Bottom line: the Cubs have less than a 5 percent chance to sign Tanaka. And if they do sign him, they will be overpaying for a major league ready prospect to gain some publicity for a few years for a bad baseball team.

December 13, 2013

SOONER TO LATER

The Cubs came to the Winter Meetings in the role as bystander.

As Gordon Wittenmyer of the Sun Times reported, the Cubs baseball brass does not like this role.

“We don’t like having days like [Tuesday], where there are big trades and free-agent signings and we’re sitting it out,” team president Theo Epstein said. “You think we want to be there sitting it out? No. But there will be a day real soon when we’re right in the middle of that because we have more financial flexibility, because we have lots of talented young players — assets that everyone wants around the game — and we’re going to be the ones dictating all those big moves.”

Wittenmyer realizes that “real soon” is a relative term,. It will not be happening this off season, even with tens of millions in increased revenues per team coming into the game from national revenue sources. 

“You hope to at least have things teed up,” general manager Jed Hoyer said. “With the way things are moving quicker, we’ll try hard to get stuff done, and I hope that’s the way it works out.”

“Our business plan and our baseball plans are actually pretty synced up in terms of the timing,” Epstein repeated from last week's comments, “and so I hope that both sides of the organization continue with their plan and execute at a high level so there’s more resources and there’s more flexibility and we have more mature, talented players in the organization.” 

The actual timing when the Cubs will be in position to make bold moves like the Yankees, Dodgers or Mariners?  “All those things are coming up,” he said. “We can’t speed it up. We can’t make time go faster, but I really feel like we’re going in the right direction.”

The continued vagueness in answering the question of WHEN the Cubs will be in position to make big moves can only mean two things: a) Epstein does not know; or b) he does know but does not want to tell the public for fear of a backlash.

But it does not take a lot of research to determine that the baseball clubs that can make a big impact in the off season are those clubs that have new billion dollar local broadcast deals. The Cubs will not be in a position to make any sort of splash with a Cubs Channel until 2019. If management would tell the fan base that The Wait is going to be at least five more years, a large percentage of season ticket holders would drop out because they would not want to spend tens of thousands of dollars for five more years for a AAA product on the field.

The Cubs baseball people also bristle at the reports that the Cubs do not have the financial strength to compete with international free agent players like Japan's Tanaka, if he gets posted by his team. However, there are signs that the Cubs are in real need of a revenue boost. That's all that Ricketts talks about: adding new revenue streams. The Cubs have also cut back on their major league payroll for the last four years. The Cubs have a huge debt service as a result of the Ricketts purchase of the team. Epstein admitted last week that the Cubs were heavily reliant on ticket sales. Attendance has been falling for the past three seasons. The Ricketts have a grand real estate development project which will cost millions to borrow and build. Based on all these factors, money is tight with the Cubs. The team asked for season ticket deposits early, and started new ticket package sales in December. This is all to increase off season cash flow. And most interestingly, the Cubs will not start any approved construction projects until the rooftop owners agree not to sue. Construction costs are bound to rise over time, so why put off non-controversial rehabilitation of Wrigley Field? One answer would be to conserve cash and improve the balance sheet.

You have a big market team acting like a small market club during its rebuilding process. It is frustrating to the baseball executives to sit on the sidelines. It is also frustrating for the fan base to wait for solid answers and improvement of their team.