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theo epstein about thatChicago Cubs President of Baseball Operations Theo Epstein yesterday addressed the Wrigley Field renovation deal announcement, particularly as it relates to the expected new revenue streams. While the added revenue streams tied to new advertising, increased fan amenities, more night games, etc. are going to be used to fund the Wrigley renovation, in the long run, they will also provide added revenue to the organization as a whole (especially when paired with renegotiated TV broadcast rights).

And Epstein says we’re going to see the fruits of that revenue directly in the team’s payroll.

“We need revenues to increase in order for us to execute our baseball plan,” Epstein told the assembled media last night, per the Sun-Times. “We expect [revenues to increase] and we have a lot of folks on the business side working hard for that. We’re not where we want to be right now in terms of payroll. As you know, it’s gone down.”

“As we move forward with our baseball plan, eventually [payroll] will go back up. Now that in and of itself won’t be a determining factor in our success. We need to generate a stream of young talent through our farm system. But we want to complement that with some aggressiveness in free agency.”

If that wasn’t on the nose enough, Epstein got very specific when asked further about the payroll situation.

“Our payroll now is third in the division. That’s fine. But it should be first in the division. So [the added revenues associated with the renovation] is one of the ways that we’re going to get there.”

Couple that statement with Tom Ricketts’ pledge that, if the full renovation proposal is approved, the Cubs will win the World Series at Wrigley, as well as Ricketts’ repeated assertion that all revenues in the door will be put back into the organization, and you get a very clear money picture.

At least in terms of what they’re saying publicly, the Cubs intend that money will not be the reason they do not win. Epstein says the payroll should be the highest in the NL Central. Epstein says payroll will go back up. Ricketts says the Cubs are going to win the World Series. Ricketts says every dollar in the door will go back into the organization.

Sure, it could all be just talk. But the talk has gotten mighty specific, and mighty strong. These guys aren’t idiots: they know that the fans will hold them to their words, and that they will be watching the financial story very closely. If payroll doesn’t start to tick up within a few years – aggressively and permanently – fans will remember these statements. And they’ll be angry.

The Cubs’ ownership and front office has now set a clear baseline expectation: if revenues increase over the next several years as they are expected to, there is no reason for the Cubs not to consistently have the top payroll in the NL Central.

  • Stockholm Cubs

    Milwaukee, Pittsburgh, St Louis, Cincinatti. It shouldn’t be possible for either of those cities to have a more expensive team.

    • gutshot5820

      Talk about setting the bar low. They should have the largest payroll in the Central without additional revenues. It sounds more like they are preparing us to lower our expectations on the payroll. Bait and switch. We had the highest payroll in the Central until the Ricketts bought the team, along with the highest ticket prices in the NL. They lowered payroll and raised ticket prices and now with ALL the expected new revenue streams he is promising that we will be the top spenders in the Central as if he is giving us a gift? What a turd.

      • Hubbabubba

        I might have been more satisfied with largest payroll in the National League, but his statement also didn’t exclude that possibility. That payroll needs to be timed though. Just spending 150M every year when there is little hope of making the playoffs makes little sense to me. I would rather they hold back this year and with upcoming cheap prospects making the bigs in the next couple years have a surge to 160M and take a real shot at the World Series.

    • CubbieBlue

      To me, a more concrete statement would be if they indicated they would be in the top 5 in MLB.

      • Cubbie Blues

        That would be a bolder, but not necessarily more concrete statement.

  • Rebuilding

    I’ve been one of the biggest advocates of an increased payroll now, but these things are always good to hear. Let’s hope it’s true. But honestly, if their plan as it stands now works there might not really be a need to increase payroll much until the young guys get extended. Let’s hope that’s the problem we face.

  • Jp3

    SIGN ALL THE PLAYERS!!!!😁 not going to lie, other than the fact Hanley is injured I wouldn’t have minded seeing us take on that salary for a terrible season last year out of him… .257/ 24HRs 92RBI 3rd baseman. If we were only looking for one of those????

    • hansman1982

      The Dodgers sent back a top-100 pitching “prospect” who was appearing in big league games. The Cubs had none of those.

      When Hanley was traded last year, I think Vogelbach was the only 2011 draftee eligible to be traded and really, the only guys worth a dang that the Marlins may have wanted would have been Brett Jackson/Josh Vitters.

      Pitching prospect with some success in MLB >>>>>>>>>>>> Jackson + Vitters.

      • terencemann

        Baseball-Reference sees Hanley as being worth .8 wins more than Valbuena last season. So the Cubs would have paid $7.5 MM more for Hanley than they did for Valbuena to add a negligible amount of wins from the time he was traded.

        • CubFan Paul

          Valbuena wears Hanley printed pajamas.

        • hansman1982

          Ya, I hadn’t actually looked at Hanley’s stats. WOW, he has fallen aways from his peak in 2010.

        • Jp3

          Are you personally paying for Hanley’s contract? I’m not saying he’s the difference in winning the central and not winning it but its an example of the penny pinching at every corner. I’ve officially crossed baseball reference as a legitimate source now of each player’s worth in wins because I just said out loud to myself that Hanley is only worth .8 more wins a year.
          Valbuena
          Year GM ABs HRs RBI Avg. obp
          2012 90 265 4 28 .219 .310

          Hanley(down year)
          157 604 24 92 .257 .322. And he stole 21 bases

          • Jp3

            I said that out loud then I laughed, you can’t possibly believe that valbuena is only worth .8 less than Hanley right??

        • Colocubfan

          After spending the Winter trying to modernize myself from W-L’s, Sv’s, etc. and changing to the newer stats, I have personally come to the conclusion that WAR is a complete and total joke.

          Buster Posey’s best WAR is 7.3, but it would be pretty hard to convince me that his injury a couple of years back wasn’t responsible for WAY more than that. Look how the Giants fared when he wasn’t available. World Series win, bad season, World Series win. I know he’s not the only reason, but his presence alone is worth way more than 7 games, especially when you compare him to the first available replacement from the minor leagues.

          WAR is a joke, and in my opinion, should be scrapped!

          • Kyle

            Correlation, causation. Study the relationship between the two, and all will become clear.

      • Jp3

        Hindsight is 20/20 and I’d have given Brett K Jackson and Vitters for him but saying someone is appearing in major league games shouldn’t wow you necessarily. We’ve got a full bullpen, a bench, and a 3rd baseman that have APPEARED in games.

        • hansman1982

          “We’ve got a full bullpen, a bench, and a 3rd baseman that have APPEARED in games.”

          When it comes to evaluating prospects, once a prospect comes up and shows they are capable in the Majors, they instantly gain more value. Especially to teams that are looking to trade everyone on their roster making more than min wage.

  • The Dude Abides

    Have Rickett$ or Theo given any timelines when we can expect to turn the corner and start to see this phase of the plan?? Everything still seems a little vague.

  • Kyle

    Once again, Theo Epstein is masterful at setting the terms by which he or the franchise is measured, and setting them so vague and far-off as to preclude the discussion of how well he’s doing his job right now.

    It’s very artful phrasing. “We want higher payroll, we’ll have higher payroll in the future” says nothing about whether the team could afford the higher payroll now, if they wanted to.

    • CubFan Paul

      The can’t afford a higher payroll now. Their lies are biting them in the ass.

      First it was the rebuilding or ‘building up’ that caused the payroll to drop.

      Then it was no good free agents are in their prime or Prince is fat.

      Then it became short term scrubs/contracts are better for the future.

      Then $130M payrolls are unsustainable

      Then we find out the Cubs are the most profitable team in all of baseball.

      Now we need MORE revenue (more than $270M) to compete against smaller markets.

      • BT

        So, to be clear, I am not putting words in your mouth, you are now flat out calling them liars. Because before, (and I could be mistaken) if anyone insinuated this, you seemed to get a bit huffy about it.

        • Kyle

          I’m calling Ricketts a liar when he said that the payroll was unsustainable.

          Epstein? He’s very careful with his wording. Nowhere did he say that they couldn’t afford a higher payroll right now.

          • BT

            Well, you aren’t Paul, but I’ll play. How do you know he is, in fact, lying? How do you know the payrolls that were, by every account artificially inflated by a Tribune ownership trying to unload the team, are, in fact sustainable with the Cubs current revenues?

            • Kyle

              Because it contradicts what we know about their revenue from various public sources, and it contradicts their own statements about the baseball budget prior to 2012.

            • bbmoney

              He doesn’t know. He assumes. Regardless of what he says he doesn’t have enough information to know. Unless of course he actually has the Cubs financials from the past few years which would be remarkable.

              Which frankly is fine, because none of us know one way or the other and it’d be boring if some of us weren’t making assumptions.

    • Not Kyle

      I always know when that picture of Theo Epstein talking into the microphone shows up alongside a fresh article on the Bleacher Nation page, that Kyle is gearing up for a flurry of posts analyzing his langauge, personality, and every move.

      It’s so routine, you can set your watch to it.

      • Kyle

        Being criticized is an occupational hazard of being in charge of a really terrible sports team in a major market.

      • When the Music’s Over

        Just because it’s repetitive, doesn’t mean what he says isn’t salient. Also, Brett is clearly covering what he has to cover, but Epstein and the rest of the front office gang express pretty much the same thing over and over again in slightly different terms, yet these communications are almost always somewhat vague. Rinse, wash and repeat.

        All that said, overall, I find it really hard to believe that if the Cubs revenue situation remained status quo (eg, no stadium renovations or enhanced TV contracts), that the team could only afford a payroll around $100M in perpetuity. Something’s missing when you have one of the largest markets in baseball, yet your payroll is sandwiched between Cincinnati and Baltimore.

    • DarthHater

      Yea, I’m not the least bit comforted by these kinds of public statements and, unlike Brett, I don’t find Theo’s statements to be “on the nose” or “very specific” at all. Given the small markets of their division competitors, the Cubs should be able to sustain the biggest payroll in the division, even during a rebuilding period. And claims that they currently don’t have the money to do that are just inconsistent with recent profit levels.

      If the FO wants to say that the payroll is low right now because, in light of the current composition of the team, they have not found a situation where it made sense to spend more, I can live with that. But I’m not satisfied with the suggestion that they aren’t spending more because they can’t afford it and won’t be able to afford it until some indefinite point in the future that fans are apparently supposed to patiently await.

      • Kyle

        Yeah.

        I find the debt explanation plausible, though disappointing and contradicting some of Ricketts’ earlier statements.

        I find the “we just didn’t want to spend right now because we didn’t feel there was anything worth spending on” to be plausible.

        But not spending because of the renovations? That’s just spin. And it’s notable that he didn’t actually say that. He just subtly connected the two. Spin master.

      • http://www.bleachernation.com Brett

        “And claims that they currently don’t have the money to do that are just inconsistent with recent profit levels.”

        According to … Forbes? The Cubs have said that those numbers are not accurate.

        You can choose to believe either side, but the Cubs have been consistent that the 2010-11 payroll levels were the byproduct of unsustainable spending by the Tribune in an effort to pump the Cubs for sale.

        As for the broader issue, it seems like you’re taking the inverse of what Theo’s saying. He’s not saying the Cubs *aren’t* spending big because the reno isn’t done/TV deal isn’t here. He’s simply saying the Cubs *will* be spending big when those things are here. That’s a pretty important distinction.

        • Kyle

          The Forbes side is based on all kinds of public information.

          The Cubs’ side is based on “Nuh-uh.”

          • JulioZuleta

            I find this post incredibly ironic.

            • bbmoney

              I was hoping it wasn’t just me.

            • Kyle

              Nuh-uh.

        • When the Music’s Over

          Something’s not right somewhere. It just doesn’t pass the generic sniff test, even with heightened front office spending and increased overall international investment.

          I don’t get how a slew of other small/mid market teams can afford near (or above) $100M payrolls, but the Cubs say that’s about as much as they can afford and not lose money. Looking at only ticket prices and attendance (ignoring merchandising and concessions, which has to be a huge boon for the Cubs vs. most other teams), if the Cubs really can only afford a similar payroll to many other small/mid market teams, their operating costs must be through the roof higher than practically every team in baseball. I’m not sure I believe that unless you start including cost items like debt financing and renovation financing into the sphere of total payroll. That or all many of the other small/mid market teams are losing gobs money.

          There appears to be some sort of disconnect.

          • CubFan Paul

            Bingo.

          • bbmoney

            I find the disconnect relatively unsurprising given our lack of knowledge about the specific financial goings on of pretty much all privately owned businesses. It’s possible their operating costs are actually much higher than other teams. It’s also possible they really were missing out on that much advertising revenue compared to other teams.

            All of which is not to say you aren’t right, it is entirely possible you are. It’s just why some people aren’t on your side of this argument.

          • davidalanu

            Well, one thing to keep in mind is that the smaller market teams get the added benefit of revenue sharing. And some of them actually spend it on their teams. That being said, I don’t think the Cubs have any business with a payroll under 100 million at the very least, 110-120 more likely. If the White Sox can afford it, the Cubs damn sure can. And the argument that there wasn’t anything good to spend it on I think is either disingenuous, or demonstrates a lack of creativity. My guess would be the former.

            Also, to an extent, I took Theo’s comments in this article as perhaps a message to the ownership. “Our payroll now is third in the division. That’s fine. But it should be first in the division.” He adds that the additional revenues will be one of the ways they get there, but I can’t help but think that he brought up them being third in the division in payroll for a reason. Whether the Forbes article is accurate or not, I don’t think the Cubs crying poor holds water.

          • D.G.Lang

            One thing that we do know is that the city is hitting the Cubs with higher taxes, surcharges,fees,etc than teams in other cities have to contend with.

            In general the cost of living, and operating, id higher in Chicago than in most other cities.

            Ricketts has publically stated that some of the terms of the purchase agreement are not disclosable under the terms of the contract. We don’t knoe exactly what THOSE terms are and how they impact available funds.

        • Timmy

          This supports everything I’ve been saying about the Cubs deliberately not investing in the team winning in the current. They’re equivocating that after 5-7 years have past and the owners have personally pocketed a preset number of profits, then revenues can be used for the team, if they get everything they want toward future team profits.

          Theo seems to be doing his best with this situation, but can we just all agree that the Cubs did much much worse than even the Tribune by being bought by the Rickets? So much for sportsmanship.

  • forlines

    I’m all for these type of comments. We know where we’re at, and we know where we want to be. Lay it out with confidence, execute, and sooner than later, it will happen.

    “These guys aren’t idiots: they know that the fans will hold them to their words, and that they will watching the financial story very closely. If payroll doesn’t start to tick up within a few years – aggressively and permanently – fans will remember these statements. And they’ll be angry.”

    Exactly Brett, couldn’t have said it better myself.

  • Cheryl

    Money doesn’t always buy quality but i helps. They seem to have made some good moves in the farm system. Any word on how that pitching coach to direct their pitching staff in the minors is doing? Their current major league club is a disaster so I spend more tie following their minor league teams.

  • baseballet

    It sounds like ownership was more strapped for cash than we had hoped. I was worried that the Cubs would end up on the middle tier of spending. They’re not just competing with Central payrolls. The more teams throughout baseball that outspend the Cubs, the bigger the obstacle to fielding the best team.

  • ibcnu2222 (John)

    White sox ad on a cubs page? Blasphemy.

    • Cubbie Blues

      It goes by your internet search history for the most part.

      • Coop

        Brett – what is up with the Donkey Show, Fat old gay guy porn, testicle enhancement, and other insane advertising on the site?!

        o.O

        • MichiganGoat

          Don’t forget the Asian Mail Order Brides ;)

  • jt

    Eye on the ball!
    What are the areas that need bucks?
    The pressing need is RP’ing! To fix that will require smart money not necessarily large sums.
    The rest, with the exception of Castro, is still being evaluated.
    Who are Rizzo, Shark, Castillo and Wood?
    What of the minor lg studs?
    I’d guess that a lot of these guys will start to define themselves by the AS break.
    My hope is that they start investing soon after.

  • Hawkeye

    I agree once again with Kyle. This makes me feel no better about this management team, very general statements that are made to appease the restless fans. It’s been pointed out before but we should carry the highest payroll at our current revenue stream. My feeling is that Ricketts is a very good business man, who will greatly improve his net worth, but winning will never be the number #1 priority.

  • ruby2626

    I asked this earlier and got no answer. One of our teams better moves was trading Maholm for Vizcaino. Despite Maholm 3 and 0 record and .000 ERA I thought it was a great trade. Any word on when this kid is going to pitch? Between him and Dillon Maples getting tired of waiting. While I think of it what about the flamethrower who was having VISA problems, is he even in the country yet? Combine the early field struggles of Baez and Soler’s apparent mental issues seems like our 3 year plan is looking like at least 4 or 5. I’d be surprised if we don’t get another top 3 draft pick the next 2 years.

  • cooter

    Hawkeye, your last line sums it up.

    • pete

      I also agree with that, which is why I feel that Theo’s statement is an attempt (possibly feeble but an attempt nonetheless) to force Ricketts’ hand to some degree on salary expenditure. Since reading the CSN interview with Theo, I really believe that Ricketts misrepresented (if not outright lied about) future spending during Theo’s interview, who probably in turn relayed the same untruths to Jed and Jason when he brought them on board. I just feel (no proof, just my gut) that this is Theo trying to publically paint Ricketts into a corner as much as he can to increase spending earlier, and possibly more, than he planned to do.

  • Cory

    Just read Julio Bourbon will be placed on waivers. Any chance we take a shot on him and send Sappelt down?

    • Coldneck

      I don’t really see what makes him all that interesting. It would make more sense to just call up Ryan Sweeney from Iowa.

  • gutshot5820

    “The Cubs are going to win the World Series in Wrigley.” A loaded statement full of sound and fury that has absolutely no meaning. If a lot of the prospects don’t reach their ceilings, bust or get injured. This is not going to end well for Theo.

    We went on the cheap for a major market team the past four years. That’s right, four years already and all he did was lobby for more more more from the City. All at the same time, lowered payroll every year, while raising ticket prices. My math must be fuzzy, but I find nothing to jump about with these recent statements. Why do you think Theo never said “highest payroll in the Central” before the renovation deal was done.

    Maybe it’s just me, but somehow it comes off as disingenuous.

  • Blublud

    I think Theo is full of BS on this one. His statement should say that the Cubs should have the highest payroll in the division right now and after everything is done, we have one of, if not the highest payroll in the league. I don’t know why they are not spending. Is it so the can be horrible on purpose to get draft pick, is because no one is out there they like, or is it because they are paying back debt. IDK what it is, but they should be spending.

    • bbmoney

      It is pretty typically for employees to call their bosses cheap, in public, to the media. He may be thinking exactly what you’ve said, but how is he suppose to say it?

      The criticism of these comments is out of whack. If people want to criticize what he’s done so far, I get it. But criticizing these kind of comments is weird, it’s all boiler plate stuff. He’s in a box…what’s he suppose to say? being critical of his organization through the press is almost certainly counterproductive and I’d be a lot more concerned if he was openly criticizing ownership.

  • Stu

    If they continue to put out a bad product, don’t spend money on it. If they say they are not going to be competitive this year and try and win this year, why spend money on them?

    I don’t get why someone would spend money to go see Valbuena, Gregg, Marmol, etc.?

    Why not wait until they are good and then give them money? Theo really is a salesman.

    • TWC

      Did you just cut/paste your “no one should spend money on the Cubs” crap from yesterday, or did you write a whole new one?

  • CUB5

    While it’s good to have a higher payroll, you don’t have to look far down the road to see the success that St. Louis has had with as much or less. I know it’s a couple of years ago, but St. Louis had 105 mil in salaries and won it all. Yes, it was an improbable run, but they did it. Even with the WS aside, they are competitive year in and year out. I think it boils down to do we want to buy a WS, or do we want to build for multiple WS? I want to be in the mix every year (though I would love a WS win in my lifetime lol).

    • gutshot5820

      For every team that you point out that won a World Series or built a team on a relatively lower payroll, there are 15 other teams that failed at it. Sure it’s easy to point out the one that was successful, but there is probably a tremendous amount of luck factor that went into it.

      Also, I really don’t understand when people keep repeating the mantra, “build for multiple WS,” as if no other team is trying to do that besides the Cubs. There is no competitive advantage in the draft anymore. So building through the farm, does not make you any different or better than the other 29 teams.

      The ONLY competitive advantage left is payroll. Sure drafting and development can improve your chances slightly, but even Theo mentioned the difference between a top organization and an bottom one is probably at most something like 4%.

      • Cyranojoe

        OK. But stressing our prospect development — which the previous FO(s) certainly failed to do — will ultimately improve the Cubs’ competitiveness, increased salaries or no. Is it enough to win a WS? No, as you say, you at least need a little luck, usually, and some loose purse strings. But the *improvement* is what reasonable fans are looking for, and I think what the current FO keeps speaking about. They’re not promising playoffs based on prospects only… but the plan presumes that a strong farm system gives us a better chance, whether it’s because those players pan out on a regular basis and/or because we trade them for other teams’ studs.

        Strong farm, hefty payroll, and a healthy Wrigley/player support environment — anybody selling that only one of the three is necessary for sustained playoff success is pretty much full of it.

        • Kyle

          Absolutely. A strong farm system is absolutely a prerequisite for a strong organization.

  • Jason

    Chicago – population 2.7 million
    Milwaukee + St. Louis + Pittsburgh + Cincinnati – combined population 1.5 million.

    We better have the top payroll in the Central at some point.

  • Die hard

    Sounds like he’s hinting that Ricketts plans to take the team public with an IPO which would be an interesting way to raise revenue

    • fromthemitten

      lmao of all the die hard posts that is the most die hardiest

  • John (the other one)

    Keep in mind that St. Louis and Cincinnati (and Pittsburgh too, I think) all have much better television contracts than we do. St. Louis, in particular, has a gigantic viewing area (and the TV money that goes with it) while Cincinnati’s new TV deal enabled their resigning of Votto and Phillips. Our contract, by comparison, is awful.

  • coal

    I don’t purport to know the magnitude of the collective impact, but there are several ways in which the Cubs are definitely worse off than other MLB clubs – who don’t have to contend with these things. Without access to detailed financials (and comparisons with other clubs) it’s impossible to know. But I do think it is easy to overlook these things.

    1) Maintenance at Wrigley. Old houses cost more to maintain than new houses. Lots of hidden labor, materials, expertise each offseason. I remember the upkeep was ultimately a huge factor in the decision to close Comiskey Park.

    2) Rooftops. Enough said.

    3) Lack of parking/revenue. Most new stadiums have 10,000 + spots. Financial arrangements probably differ, but the clubs make lots of money on parking.

    4) Night games. I do think weekday vs. weeknight is a factor in attendance, ads, etc.

    5) Luxury boxes/suites. The Cubs offering here is pretty awful. With newer/modern suite set up (as most parks have) they could definitely generate more revenue here.

    6) Amusement tax. 12% on top of each ticket to the City is a big factor in the Cubs having the highest ticket prices in the NL.

    7) Advertising/landmark restrictions. I don’t love website ads, but they are necessary. I love the atmosphere at Wrigley, but it’s not my place to tell Ricketts to subsidize my interest in an ad free environment any more than it is fair for me to tell Brett not to accept advertising money because I don’t like it.

    8) Cost of doing business in Chicago.

    • Kyle

      Those are more than balanced out by:

      3rd highest ticket price in the MLB

      One of the highest estimated average non-ticket spending per fan in MLB

      Scalping own tickets

      Getting a cut of revenue from outside the ballpark via the rooftops

      Could they make even more if not restricted in many of these ways? Absolutely. But the Cubs are a revenue giant.

  • coal

    I don’t think it is possible to know with any confidence that these factors are “more than balanced out” by the things you mention. That was the point of my post. Impossible to know – but clearly the Cubs have factors to contend with that are unique (and probably underappreciated) by the average complaining fan who multiplies average ticket price x 3 million minus payroll.

    As for getting a cut of the revenue from rooftops (which is 17%) – do you think the Cubs would prefer to sell a $50 ticket plus merchadise plus food, drink, etc. or get $8.50?

    No question the Cubs are a revenue giant. But they have several limitations that are worth remembering any time the argument about payroll and sustainability comes up. It’s more nuanced than many make it out to be.

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