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Welcome to the Cubs TheoChicago Cubs President of Baseball Operations Theo Epstein was on The Score yesterday to discuss a variety of things, including the Cubs’ exceedingly poor start to the 2013 season. You can listen to the audio of his appearance with McNeil and Speigel here – it’s always useful to hear from Theo. Among the topics: the amplified feel of April (even if it’s unreasonable, given the sample sizes), Dale’s comments about demoting players, the problem with fundamentals (incidentally, Theo said one way to address the problem is to bring in fundamentally sound players, identifying David DeJesus, Nate Schierholtz, and Luis Valbuena by name (interesting choices, eh? especially that last one … is Theo sending a message?)), and more.

The conversation, though, turned to the financial side of things – as it always does these days – and Epstein had some interesting things to say. None of it deviated too substantially from what he’s said before, but there was an additional sense of … I don’t know what exactly … urgency? Frustration? It certainly sounded like frustration. Whether he’s frustrated by the questions or by the financial constraints he’s finding, I don’t know. But his comments stuck in my craw since I first heard them yesterday, and it wasn’t until I sat down to write this that my thoughts finally crystalized.

Specifically, Epstein was asked why, in a market like Chicago and with the theoretical revenue advantage available to the Cubs, the Cubs couldn’t focus on rebuilding but also “try just a little bit harder” to put a non-laugher on the field.* After emphasizing that this cuts to the very heart of why the Wrigley renovation and new TV deal are so important, Epstein sounded a bit annoyed.

“It’s not a choice,” Epstein said of the build-for-the-future/win-in-the-present dichotomy in his interview with The Score. “We are not making a fundamental choice to only focus on the future. We’re not withholding dollars from this year’s team. We are spending every dollar that we have on this baseball team. We maxed out our payroll last year and we maxed out our payroll this year. It’s not a choice. It’s not like we’re making a conscious decision to say, ‘Hey, let’s withhold $15-20 million from the 2012 or 2013 payroll because we don’t think we’re quite good enough or it’s not worth it to spend it there. Let’s save it for a rainy day. Or let’s save it so we can get that free agent in 2016.’”

“The baseball department is spending every dollar that is allocated to baseball operations,” Epstein continued. “Yeah, we’re spending it in the draft and we’re spending it in the minor leagues. There’s only so much you can spend there. We’re also spending every dollar we have available on the Major League payroll. We need a renovated Wrigley Field to produce more revenue. We need new TV deals so we can generate significant local revenue that way.”

Epstein then pointed out the inherent disadvantage the Cubs face in the newly-devised draft, in which each of the other four teams in the NL Central are getting competitive balance picks after the first round, because of their market size. The Cubs don’t get such picks. At the same time, Epstein said, those teams have escalating payrolls, and two have passed the Cubs. That is why, he underscored, the renovation and the TV deal are so important.

I don’t quite know how to take these comments. Epstein is clearly frustrated, but I can’t tell whether he’s frustrated by the media’s repeated questions that (he believes) unfairly paints the Cubs’ financial situation, or whether he’s frustrated by a lack of resources. If it’s the latter, I can’t tell whether he’s frustrated by a city that has been so intransigent in allowing the Cubs to generate the revenue that they could be generating, or whether he’s frustrated by (what he perceives to be) a tight-fisted owner. I suspect that folks will take Epstein’s comments to support whatever pre-existing beliefs they already held.

To me, it sounded a bit like Epstein was doing some selling. Let us get the renovation done the way we want. Let us shop around for the biggest, best TV deal. That’s how we return to competitiveness financially.

Is it legitimate? Is it plausible that the Cubs’ revenues allow them to have just the third largest payroll in the NL Central, even if every dollar available is being spent on the Cubs’ product? I don’t expect the Cubs to open their books, and I found the Forbes estimations to be far from reliable, but I think, in light of these comments, it’s fair to start wondering where all the money is going.

Contrary to Epstein’s comments here, we had been led to believe that current revenues were potentially being rolled over into future years. From Jed Hoyer, last September: “All the money [that comes in the door] will go back into the team in some form or another whether it’s things that can help us in the future, whether it’s free agents or keeping money aside for the next free agent class. All the money baseball operations is given will always go back to the club.”

If that isn’t true, and if the Cubs’ revenues justify a mere $100 million payroll with no rollovers from year to year, it becomes very difficult, as an outsider, to discern what is happening to the rest of the Cubs’ revenues. Sure, I can piecemeal parts of it with amateur spending, Dominican facilities, and Wrigley upkeep, but I’m not sure I can get from $100 million to the realistic level of Cubs revenues. I’m sure a large portion of that difference comes in the form of debt service payments, about which I’ve previously expressed my frustration. (In short: using Cubs revenues to make Ricketts Family debt payments is not putting that money back into the Cubs organization, it is putting the money, essentially, into the Ricketts Family’s pockets. I don’t blame them for doing it – they own the team, and this is their revenue – but I’d at least like to see an acknowledgement that, because of these debt service payments, not every single dollar that comes in the door is going back into the Cubs product.)

Ultimately, fairness dictates that I concede that which I do not know. When it comes to the Cubs’ finances, I – like you – know virtually nothing. It’s entirely possible that, if the Cubs did open their books and show us their financial statements, we’d all go, “Oh, they really are spending all that they can. How about that.” We just don’t know. So I’m in no position to cast aspersions.

But, with every Epstein statement that is more difficult to square with what we previously believed to be true, I have to watch the financial story more closely.

*I have to wonder to what extent Epstein would love to answer this question with something he’s said before: if you’re not going to make the playoffs anyway, there’s no value in winning 75 games as opposed to 65 games. Indeed, it’s actually worse for you long-term to win 75 rather than 65, because it affects your draft position and international spending. I suppose he felt he could say that in response to this particular question, however, because then you’re essentially admitting that this team was built to be a loser. I can understand why he can’t admit that, even if I do believe that the team was built with sellable assets (and the attending losses) and 2014 in mind, rather than 2013. I also think that was the right approach all along, but I’m getting off point. Sort of.

  • TWC

    It’s amazing to me that for all of the non-stop Cubs revenue questions that Theo, Jed, and Tom Ricketts get from the media, no one has ever explicitly pressed them to determine if revenue from the team is going towards debt service payments. To me, that’s an embarrassing failure on the part of the journalists asking the questions.

    • http://www.bleachernation.com Brett

      I wonder if it’s a question easily asked, but one that is also easy to dance around (Theo and Jed would defer to the business side, and Ricketts could probably do some tap-dancing about financial instruments and the entities in the Cubs ownership chain – because some of the debt is reportedly money the Ricketts borrowed from the Ricketts Family, so it’s complicated).

      • hansman1982

        Or maybe it’s so easy to ask it’s easy to not think of.

      • TWC

        Oh, I’m sure. They’re all very good at non-answers.

        But that’s why I rewrote my comment to say “explicitly pressed”. Keep pushing. Especially if the trio keep receiving the same question. We’ll get a definitive answer sooner or later.

  • The Dude Abides

    Considering the shit storm you are describing with the finances we are lucky to have Theo to sort this out. Hope he stays, I suppose that will be the ultimate indicator of where the frustration is coming from. Hopefully Rickett$ didn’t over hype the assets available and timeframe to Theo early on to turn this around and add to his legacy….

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  • FFP

    I see perhaps a false either/or in your reasoning here: ” (Theo)’s frustrated by a city that has been so intransigent in allowing the Cubs to generate the revenue that they could be generating, or… he’s frustrated by (what he perceives to be) a tight-fisted owner” Brett; perhaps instead today’s comments are a swipe at in-house Business Ops’ (or someone specifically in or leading Business Operations) inability to move ahead more fluidly or profitably with ad revenue, renovations, TV negotiations. Aren’t these people who work for this owner holdovers from the previous one? That’s not a tight-fisted owner. That would be an ineffective employee, albeit one possibly equal to or greater than Theo’s (current) rank.

    I am however swayed by your supposition of debt service’s possible impact on the team on the field.

  • donnie621

    I have said before and will repeat. It was a MISTAKE for Ricketts to make an absolute commitment to Wrigley field. He should have explored other options with his 600 million dollars insted. I think he has hamstrung the team and the organization. So where are we? Are we rearing down the building (the team) only to have the architect and builder walk off the job? Frustrations go some place… eventually.

    Time to stop blaming Joe Ricketts and focus on where things are. You have a political class that thinks what you own they own… your money is there’s and on and on.

    Get out of dodge is my advise… still time!!!

    Rickets should say “you know, I made a mistake committing to the city” “We are going to explore other options” Then say GOOD-BYE!

    • hansman1982

      A renovated Wrigley with video board, OF ads and a good TV deal is worth far more than a stadium in the burbs.

      • Jay

        That would all be fine IF the frickin’ city would stop acting like the Cubs and Wrigley Field OWE them anything. I mean, Ricketts has given up on public funding (although it sounds like he could sure use it if he’s using team assets to pay down the red ink he got into by buying the team in the first place) so the least these nimrods could do is let him fix up Wrigley with his OWN money the way he wants to maximize revenue.

        I am confused about the $100 mil payroll term—is he referring to ALL baseball operations or just this one? cause there’s sure not $100 mil out there on the field that I can see, even with Soriano’s 18mil, Marmol’s 9mil, and whatever Castro is getting now.

        • terencemann

          Payroll is listed at $106 MM on Cot’s contracts. That includes Soler and Concepcion.

          Maybe Chicago doesn’t owe the Ricketts a new stadium but you have to keep in mind that it’s called “Wrigleyville” for a reason – the whole neighborhood grew up around the park. There are restaurants and bars that get a lot of business thanks to the park. This isn’t some stadium that’s just surrounded by parking lots like most new stadiums.

        • BluBlud

          Jackson 13, Feldman 6, Baber 5.5, Villanueva 5, Schierholtz 2.25, and Hairston 2.5 and Castro 5. add that to just Sori and marmol, you are already close to 70. Thats before Shark, Garza, Dejesus and few other who are not on rookie contracts.

          • willis

            Gosh damn, they spent 11.5 on a guy who is used terrible goods and a guy that won’t throw one pitch for the cubs this year. That’s kind of hilarious.

            • terencemann

              If you’re talking about Baker, he’s a good pitcher returning from a surgery with a high success rate. The only reason he wouldn’t sign with the Twins was because they demanded a team option year and he wanted to rebuild his value for free agency. You can look at him as an insurance plan if the Cubs start trading off pitching at the deadline as there is a chance he’ll be a Cub all year at this point.

          • Kyle

            For some reason, Cot’s lists Jackson incorrectly.

            It says he’s getting $13m/year for four years, but it’s not true.

            He’s getting $11m/year for four years and a $8m signing bonus this year. We’re paying him $19m.

            • JulioZuleta

              I’ve noticed Cot’s messing up lately. Ever since it was sold it’s gotten a little sloppy.

            • CubFan Paul

              That signing bonus was paid in 2012 on last year’s budget (mostly for tax purposes for EJax), so just $11M this year

            • terencemann

              They just split the bonus over 4 years. In the notes on the main page, it does have his correct salary structure. FYI, I guess.

              • CubFan Paul

                “They just split the bonus over 4 years”

                Are you sure about that? I’ve seen that nowhere

              • http://www.bleachernation.com Brett

                I don’t think they actually did that – Jackson, because of the expected change in the tax rate the following year, would have very much wanted all $8 million in 2012. The Cubs, for their part, would have obliged if that’s what got him to sign.

                It’s possible it was split up, but I don’t think that was a big bonus like that came up in the first place.

                • terencemann

                  I mean I think Cot’s split up the bonus, whether on purpose or due to error I don’t know.

                  • http://www.bleachernation.com Brett

                    Ah. Well, it’s possible Cot’s split it up because that’s how salary is treated for CBA purposes – all contracts are broken down to AAV. Then again, I don’t think they do that for all contracts on Cot’s, so who knows.

      • The Dude Abides

        Does Wrigley deal dictate we get the new TV deal? Does video board & OF ads help add to a facility that is land locked? The draw for FA’s to be will in part include clubhouse & training facilities. I don’t think we will ever leave but putting lipstick on a pig doesn’t fix the entire tired facility called Wrigley Field.

    • DarthHater

      Foxnews called to thank you for the audition, but they currently have no openings.

  • MightyBear

    This is a little contradictory to what he said when he took over the job. Paraphrasing “There’s more than enough resources here. (to put a consistent winner on the field)”

    Maybe he’s selling the plan (renovation, tv deal, etc) and maybe he’s sick of the question but he has changed his tune

    .

    • http://www.bleachernation.com Brett

      It pains me to say it, but I think you’re right.

      Which I suppose isn’t necessarily a criticism of anyone, but it’s an acknowledgement that maybe things haven’t played out financially as Epstein expected.

      • hansman1982

        I’m guessing the plan was to get the city/state to pay for the renovation, when that didn’t happen, money has been leaving to pay for the renovation.

        Comeon, Ricketts, just show me the books so I can be satisfied with whatever the answer is.

        • pete

          The more I read about the finances and also read Theo’s recent interviews, the more convinced I am that Ricketts significantly misrepresented what he was willing to do financially when he was courting Theo. That Theo can say the 2013 MLB payroll is maxed out, especially when you take into account Hansman’s post about proposed spending as to Pujols, etc., strikes me as so disingenuous that I cannot help but wonder if he is being a shill for the organization.

          That said, I am not real sympathetic for Theo. I think he took this job as much for his legacy (being the GM who ended the 2 infamous Series droughts) as much as for any other reason. Then he got duped by a facile rich punk. IMO.

          • hansman1982

            I don’t think Ricketts would have lied to Theo, that’d be a pretty bad thing in a small business world such as baseball. My guess is the way the renovation went down changed A LOT of things.

            Or, Forbes is WAAAAAAAAAAAAAAAAAAAAAY off on the Cubs finances.

            • pete

              In a vacuum, I would agree with you completely on the lying, and I do agree that there is a percentage of the MLB community that would react negatively to it. However, professional team sports is replete with: (1) owners who seem to have no problem changing the parameters of their hires, like Jerry Jones and Donald Sterling (and other less egregious owner examples); and (2) highly ambitious men with massive egos who desperately want to run these billionaires’ organizations for whatever peronal motivation and think so highly of their own competence that they “know” that they will be the exception and ignore any and all warnings.

              Also, I am sure that there were some surprises for the Rickettses after they bought the team, including how the renovation went down. However, if post-purchase circumstances blindsided them this much, they had no right buying a MLB team.

      • Spencer

        I know we will never, ever, ever know the answer to this question, but I wonder if Theo was promised more financial resources than were actually available when he took this job. I have a hard time believing Theo would just take Ricketts at his word when Ricketts said something like, “Oh yeah, we have loads of money. Spend whatever you want,” without doing some independent research or digging on his own about the Cubs’ financial situation.

        I also wonder if there is any disconnect at all between Theo and Ricketts in terms of dolla bills. It certainly seems like there is. Remember, when Theo took this job he pretty much explicitly said this is a ten year gig. I’m sure he doesn’t wanna spend half of that rebuilding the team and trying to get increased revenue flow. Maybe he expected more money to come in earlier than it actually has, he maybe he was simply promised more money early on, only to be thwarted once he actually tried to spend. In any case, if we take Theo at his word, he is hamstrung by a lack of cash.

        At least this should put an end to the thinking that Theo doesn’t wanna spend big money on free agents to build a winner.

        • hansman1982

          I’m thinking they were confident they would, get a renovation deal done sooner, rather than much, much later and that the city or state would pick up at least a portion of the bill or eliminate some taxes from the Cubs.

          It may have been that Ricketts was completely open with Theo and that Theo, having direct knowledge of revenue with the Fenway renovation, was basing some of his early “excitement” on that portion of it coming through.

          • pete

            A few weeks ago, didn’t Forbes indicate the Cubs had a $30 million profit in 2012? I kind of took that with a grain of salt at the time because of the secretive nature of MLB bookkeeping but is there any way to know if that was close to correct? And, if close to true, how can the maxed out payroll position jive with that?

            Also, did the organization ever cry poverty last year? And, if so, to this extent?

            • hansman1982

              If they did have $30M in operating profit then it’s pretty easy to explain that down to $3-4M of “true profit” that could have been spent on additional payroll.

  • donnie621

    hansman1982

    How would you know?

    • hansman1982

      A renovated Wrigley will have the same revenue sources as a suburb park but draw more every year and for the next 50 years.

  • hansman1982

    There is something here that just doesn’t make sense.

    We are maxed out at payroll but it was reported the Cubs made a $35M 5 year offer to Pujols.
    We were ready to spend $23M on Darvish plus the contract.
    We were ready to spend $6M a year on Cespedes.
    We were ready to spend $5M a year more on Sanchez than Jackson.

    • TWC

      You’re forgetting that Moreland is receiving $18m per year.

      • hansman1982

        He gets paid by the word, hence him never shutting up.

        • TWC

          That would explain it.

    • Spencer

      Yeah…but the Cubs didn’t get any of those players, so, if they had, I doubt the transactions that followed those acquisitions would have been the same.

      • hansman1982

        True and that’s a rabbit hole that is impossible to go down.

        It’s just that something isn’t adding up.

        They were potentially willing to spend more but it appears that they don’t have the room to spend more but their payroll is more in line with the pre-2008-2011 blip.

        Something isn’t jiving out somewhere, I don’t know who or what it means but just something is out of whack.

    • Kyle

      Well, on the one hand we’ve got vague reports, most of which were contradicted by other vague reports at the exact same time.

      On the other, we’ve got Epstein’s explicit word. At this point, I’m willing to take him at it.

  • Andy

    I wouldn’t put it out of the realm of possibility that Theo is out saying “This is all I can do with the current revenue” to put some pressure on the city and the neighbors to push through the renovation plan. Actually, I kind of like it. The “let us run our business and we win, or hold us back and we suck” ultimatum is a pretty good one. If he’s going out to stump for Ricketts on getting the job approved with the quality of the product on the field, it’s a genius move.

    • ari gold

      I couldn’t agree more Andy. I think he’s just playing the game. Why wouldn’t the Cubs say these things to put pressure on the city?

      • Andy

        It’s not the city, anymore. It’s the neighbors. Most of whom are fans. I like the “Do you want us to suck?” power play. It’s manipulative as heck. I love it.

  • Frank F.

    Epstein has a background in law and PR, two professions known for their ability for taking any situation and using only the relevant facts to make it look optimal and divulging additional information as needed.

    So why is this suddenly coming out? Why has the story changed from we could build a winner now, but if we suck it up the next few seasons, we’ll be better long term to we’re broke. Could it be that there’s already trouble in paradise between management and ownership and Theo is passive aggressively throwing Ricketts under the bus before he has a chance to do the same? Or could Epstein be the one scammed, and Ricketts built his front office dream team to be more of a PR team to keep fans coming in.

    For years, Crane Kenny was vilified for sticking his nose in baseball affairs that weren’t his business. And why not; his heir of douchiness made him an easy scapegoat. But it’s very possible that while Hendry was out glad-handing and building a winner (Read: monster) he was borrowing money from the non-baseball budget-which is in fact a thing, and Crane Kenny’s responsibility. Now they have to repay that fund at the expense of the baseball budget. It does add up; remember last year, all of the random non-baseball personnel that were being let go? Well the non-baseball budget is what pays their salaries, and if that money is tied up, they had no choice. I’m sure someone will mention the McDonalds and various renovations argument, but the Cubs are above all else a business, as is every sports franchise and sacrificing the little guys and putting the money toward bigger and better endeavors and investments is what businesses do.

    Long story short: when Theo started, was he lying or lied to?

    • EvenBetterNewsV2.0

      Why is this coming out now? To answer that question for you I would say this is the way he has always said it. This stance hasn’t changed.

  • baseballet

    Ricketts crying poor is unfortunate. I like the front office he assembled but wish an owner who could afford higher payrolls would have bought the team. The fact that after spending every available dollar the Cubs can’t outspend the Reds is not a good sign.

    • Andy

      I think they will be able to in time. Their revenue streams don’t match up with teams like the Reds (or any other team) because of their ballpark and TV contract. It’s outdated.

      I think we’re all spoiled by the huge payrolls the Tribune Co dished out. Last season, the Cubs may have spent all of their available money, but they were still paying Carlos Zambrano, et al NOT to play for the Cubs. This season, they still have some heavy contracts, like Soriano and Marmol, which limit the amount of money they have left to spend on other pieces.

    • willis

      Yes, that’s pretty sad. Especially seeing the lack of support, even with a great team, that the Reds get from their fans. To be staring up at them, or any team in this division money wise, yet claiming they’ve spent every dime they have, is tough shit to swallow.

      The question does become, and we’ll probably never know, what was said ini negotiations to bring Epstein and Co in vs what the truth really was? Ricketts’ ownership has been a disaster so far on the major league level, so giving he and his family any benefit of the doubt isn’t going to happen. So I’m afraid this will cause a flare up between fans and their owner. I believe what Epstein is saying, and I also believe that he expected more out of his ownership with this opportunity.

      Something fubar is going on though. That’s for sure.

  • JulioZuleta

    This post is going to make Kyle’s week.

    • JulioZuleta

      Well, that’s not fair actually. I don’t think he wwaannttss the Cubs to be out of money, but you know what I mean…

      • When the Music’s Over

        Well, he gets a lot of shit for going against the grain. A lot.

        Lesson learned for all the people that dig on him so hard: just because someone doesn’t take the optimistic/trusting route in terms of believing what the Cubs ownership and front office says, doesn’t make that person wrong.

    • Kyle

      It’s certainly fascinating.

      It means all the “Epstein is brilliantly saving money for the future” vs. “Epstein is a lazy bastard who didn’t want to spend any money” arguments were moot, because there was no money.

      • JulioZuleta

        It’s concerning at least. I’m holding out hope that this is just more angling/pressure for allowing the Cubs to maximize Wrigleyville revenue streams. Like others have said, it’s not really plausible that the Cubs are tapped out right now, unless Ricketts is just being incredibly stingy.

        • Kyle

          I find it to be very plausible, if Ricketts is funneling a ton of money into debt service and those empty seats at Wrigley are as damaging to the bottom line as I feared.

          • CubFan Paul

            B.Levine reported that they have to pay $40M for debt services.

            That would explain a lot.

          • Still Love the Cubs

            Funneling a ton of money to debt service does not equal tapped out. He could change that amount at any time he deemed it necessary to divert it back to baseball ops.

            Maybe (possible conspiracy theory here) they couldn’t get the loans they needed for the renovations unless they paid down the debt-load a little so that the debt to income ratio was more to the bank’s liking? Either way, I just do not believe that when the FO deems they need the money that it will not be there.

  • DarthHater

    If all the available dollars have been spent and the roster is as bad as it is, then it would appear that the FO has done a pretty poor job of spending the available dollars.

    • MightyBear

      It’s tougher when a lot of your dollars have already been spent ie Soriano, Garza, Marmol, etc.

      That’s 40 mil of your 100 mil payroll spent on inherited under achievers.

      • willis

        Don’t forget wasting about $11 million on Baker and Feldman.

        • Pessimistic Fan

          Yeah, but plenty of teams have their share of underachievers hurting the team. Bottom line is that the future is beginning to look very bleak if Theo is indicating the Cubs can only spend like a mid-market team in the future plus whatever new revenue is generated. Can we really expect the stadium and surrounding changes will generate another 50-60 million a year?

        • When the Music’s Over

          I really wish someone would pay me a year’s worth of salary to get in shape (see Baker) at home.

        • MightyBear

          Baker and Feldman were signed by Theo. I was pointing out what he had left over from the Hendry days. Baker will end up being a good signing once he gets healthy. Guy pounds the strike zone.

  • Jon

    It is disappointing that the Reds are the only team in the NLC outspending the Cubs on player payroll and everyone else is spending less and is ahead of the Cubs in the standings. The little information I can find indicates that the Ricketts family and Mark Cuban have roughly the same approximate net worth; however, from a pure qualitative point-of-view I still would have liked to have seen Mark Cuban been the buyer of the Cubs. You can only speculate how things may have been different at this point. Cuban at least had the money and experience being an owner of a professional sports team.

    • willis

      I agree but I don’t think he would have come anywhere near being approved to buy the cubs.

  • BluBlud

    I not sure that finances are the problem. 107 million dollars is more then enough to put a competitive team on the field with. I believe the cardinals won a WS with a lower or similar payroll, and the Rays are always competitive with about half that amount of payroll. Would I like it to be higher? Yes. We all would. However, if the Ricketts choose to pay back their debt with their money, then that is their right. I will never get mad at an business owner for doing that. That is the purpose of running a business.

    The question I have is some of the decision that Theo has mad in regards to the Roster. There are certien signings that Theo mad this offseason, some I liked, some I didn’t, that that are working out, some that are not. Thats not the point however. The point is Theo chose to dump, or hold others back in AAA certain players in favor of the ones he signed. Hindsight is alway 20/20, but lets just look at a few.

    Keeping Campana and starting Jackson in the big squad instead of signing Hairston and Schierholtz. These signing cost us 4.75 million. Campana and jackson would have cost us about 1 million combined, That is a Net savings of 3.75 million.

    Signing Baker, Feldman, Villanueva and Jackson instead planning to go with Raley, Wood, Rusin, Garza and Shark. These signings cost us 29.5 million dollars. Now Villa has work out, Jackson has struggled and Feldman has just stunk. We all know bakers has not even pitched. Garza was expect to be ready for the season, but we all know that story also. But that’s not the point. Using Rusin, Raley, and Wood, Instead of the four we sign would have saved us close to 28 Million dollars.

    The last decision is giving Stewart a 2 million deal, not know his full status. Now I supported this, and personally think Valbuena is not worthy of a starting job, but once again, that’s not the point. going with Valbuena and allowing and allowing Lillibridge and Clevenger to make the roster, like they did anyway, would have saved us the whole 2 million.

    That thats 33.75 million we spent that we didn’t need to. Now using hindsight, and baseball logic, not my personal preference, I would have still sign Schierholtz, and Villanueva. thats 7.25 million. Even though I supported the Jackson signing, if I had known the finances were the way they are, I would have never signed him as a GM. And with tight Finances, you just can’t afford to take a gamble on Baker. so the 7.25 spent on Schierholtz and Villa is good money. that leaves us with 26.5 million dollars to work with. That would have given us plenty of room to trade for Justin Upton(I know the part about giving up prospects + there is no way to proves he would do in Chicago what he’s doing in Atlanta) or B.J. and Mark Reynolds(No way to determine if would have the success he’s having now either.

    I know these moves are looking at things in hindsight, and using the benefit of it to see who succeeding and who isn’t. But I was under the impression that some of these deals were made because we had the money to play with. When Payrolls tight, you have to operate a little different. Theo has never had to do this before, and that could or could not be a problem.

    • BluBlud

      Damn, I’m hiring a personal proof reader. If you are interested, it pays $5 dollars a year. Please apply below. ;)

    • BT

      I’m not sure I understand the point of any of this. Half of it is based on judging Jackson and Feldman’s entire contracts as failures after less than one month of results, and the other half is based on (your self admitted) moves made completely influenced by hindsight. I agree, IF Feldman spends the rest of his contract sucking that it was a bad contract, and I agree that IF I had a crystal ball and imaginary unnecessary prospects that trading for Justin Upton would be awesome, but basing a critique on this criteria seems a tad unfair.

      • BluBlud

        The purpose is, with a tight Payroll, you have to operate different. Take a team like the Rays. If they were getting Baker healthy, there is no doubt they would sign him for 5 million. However, when money is tight, you can’t just throw 5 million into a pitcher who may or may not pitch. Same with Jackson. If we had the ability for a higher payroll, then signing Jackson was a good Idea. But if signing Jackson put us at the edge of our allowable payroll, then all of a sudden, that becomes a bad signing, even if he produces as expected.

        Look at it this way. If you had a job paying you 100,000 dollars a year, buying that $50,000 BMW is probably not going to be a problem. Now if you are only making $30,000 a year, buying a $50,000 BMW is probably a bad idea. If the dealer agrees to give you a $10,000 discount, it’s still a bad Idea, even with the surplus value.

        • Cyranojoe

          You have to get the players when they’re available. And you get a discount when you pick up a guy coming back from an injury. I’m not judging the Baker deal until he comes back and pitches — or at least until late in this season. If he’s not back before the end of the year, we can talk about wasted cash.

          As for Villanueva over Feldman/Baker, all three seemed like a gamble. Hitting on one out of three honestly doesn’t seem like a bad rate for baseball, though the jury should remain out on all of them until we’ve seen a full season, IMHO.

    • wax_eagle

      Too many moving pieces here to address it all, but signing guys who might be trade pieces at the deadline this year, or guys coming off bad years at below market is a good strategy.

      To address the prospects issue, there are two things here, one you don’t want to put a guy in front of the Chicago press when he really isn’t ready for it, and also, you’ve got a limited number of cost controlled years on these guys. You have to watch service clocks and there is no sense starting them early if you already know you won’t compete this year.

      • Blublud

        I think you are wrong. That is a piss poor way to handle your player. If a player is ready, he should play. Holding a prospect back because you are not competitive is unfair to that prospect and sets a bad precedent IMO.

        • Cyranojoe

          I’m not aware of any prospects who are dominating so much that they or the Cubs would benefit from their joining the current big league team.

  • Not Kyle

    It’s beginning to sound like an assumption was made that Epstein would have the financial flexibility to spend in the free agent market and build the farm system as he see fit.

    “The Cubs are one of the most recognizable names in teams sports. They are in a very large market. They have a huge, devoted, and passionate fan base with means large attendance revenues/merchandising/TV contract possibilities, etc. They have a recent history of fielding a higher payroll team.”

    And yes, even the chance to build a legacy for himself as the GM/Prez who helped two cursed franchises finally win a World Series.

    What if Ricketts assured Theo that he would have plenty of money to spend? Maybe not Yankees or Red Sox money, but definitely similar to what had existed in the recent past. Like Brett said, A) it’s tough to blame anyone without really knowing the whole story, which we may *never* know, and B) it’s a necessity to make carefully constructed, vague comments preaching patience when your boss is trying to get the team finances in order without drawing attention to a potential problem that might exist.

    I’ve worked with legal professionals and financial service advisors who end up geting called in to help people who *seem* to be very, very, very well off financially (live the lavish lifestyle, practically vomit overly positive things about their business/successful investments/future ambitions to media outlets), but in reality are struggling mightily with tons of crippling debt/lawsuits/criminal charges/etc.

    While I have no idea how the finances behind the Cubs really are, it’s conceivable that a degree of “sounded better in brochure” could be at work here.

  • Stu

    The comments about all the money going back into baseball is meaningless. We don’t know if the family is drawing huge paychecks and funneling extreme personal expenses and labeling them as “baseball expenses”.

    Anyone who has worked for a privately held business in which the owner put his wife on the payroll as a “consultant” wouldn’t believe any of this garbage. There is a reason for Ricketts to hide behind Theo and others to spin as much as possible so as to distance people from really looking at reasonable number calculations.

    The Cubs are playing chicken with the Diehards to see how long they can milk the emotional loyalty. It will only end when the attendance reaches an unprofitable level.
    Then they will sign legitimate players.

    • CubFan Paul

      “The Cubs are playing chicken with the Diehards to see how long they can milk the emotional loyalty. It will only end when the attendance reaches an unprofitable level.
      Then they will sign legitimate players”

      “Committed”

  • Will

    As they would say on the Cubs cbssports board, why not both? What if the finances are not what Ricketts/Epstein expected AND he is sick of the question.

    To me, it isn’t about money (at least in terms of spending via FA’s). If it were about the FA spending, the Florida Marlins would have improved last year, the Yankees would be in the W.S. each year, and the Blue Jays/Angels/Dodgers would have the best records in baseball. To me, it is just another sign that this franchise was absolutely decemated as much as everyone thought in regards to prospect and overall talent from the previous ownership, and it is going to take as long to rebuild as the original plan estimates (2014-2016).

    I keep going back and looking at the 2006 payroll and seeing 96M, then the 144M payroll in 2011 and now 106M in payroll and ask, did payroll really go down by nearly 40M since 2011 or did it rise 10M since 2006? I think it is more rational to believe that revenues increased marginally (in baseball terms) since 2006 rather than to think that revenues went up nearly 50M in 5 years time and the Cubs have just been pocketing the difference for 2 years.

  • Melrosepad

    Remember too, that when Theo was hired the CBA wasn’t there limiting the draft spending and international market. So with that limit in place now he has to find a different way to manipulate the system to our advantage. I’d imagine that threw a wrench into the plans.

    • pete

      I agree that it clearly threw a wrench into things as they existed at the time. However, I recall reading that Hendry told Ricketts before the 2011 draft that 2011 was probably the last year that the draft would be like that. If Hendry saw that change, clearly Theo did also.

      Putting aside any possible PR rationale, it always seemed to me that Ricketts hired Theo for his perceived ability to think/manage “ahead of the curve” as much as for any other reason. (Also, Theo has never really attempted to dissuade the opinion of many that he is the smartest guy in the room but that’s more of me sniping a bit.) And, as you correctly note, the new CBA changed the paradigm for every team; however, the guys in the vanguard are supposed to take advantage of the confusion, not curse the dark. I need to stop. My mixing of metaphors is getting out of hand.

  • Kyle

    This is so much more specific than Epstein or anyone with the Cubs has been in a long time. When Epstein talks about how he’d like to have more money to spend and ties it to the renovations, I write that off as spin. When he specifically states that he left no money on the table and didn’t hold anything back because of the state of the team, as many have speculated was the case, well now he’s gotten my attention.

    I’m forced to believe that either Ricketts was lying when he said that the 2012 baseball budget was the same as the 2011, or that Epstein is lying now. I find Epstein to be much more credible.

    So basically what we’re left with is that Ricketts overleveraged himself to buy the team with the assumption that they’d be able to get the government to pay for the renovations and use the expanded revenue streams from the renovations to pay for the debt service.

    But the gov’t refused (and Ricketts did a particularly inept job of negotiating, imo) and so now the increased revenues from the renovations are going to be cannibalized for the next five years to pay for the renovation itself. So now the debt service is taking a chunk out of pre-existing revenues

    To pile that on, attendance is plummeting due to poor results. We’re going to be down 600-700k fans from the year before Ricketts took over. At Cubs’ prices and in-park spending/fan, that’s something like $75m to 100m in lost revenue. If Ricketts let that happen because he diverted $30m from payroll to debt service, then he looks comically inept and in way over his head.

    Combine those two factors, and we’re officially a mid-market team at best for the next five years.

    • bbmoney

      I can’t tell if I’m more concerned about Epstein’s comments. Or that I find myself almost completely agreeing with what Kyle posted here, or just some weird combination of both beating me into submission.

      Whatever the case, this is the first time I’m actually starting to worry about the Cubs spending money on FAs when I thought they would (starting this coming offseason). If they can somehow re-work their TV deals before they expire into anything close to what we’re seeing teams like the Dodger and Rangers get, my worry will probably disappear….at least once that happened. But I don’t see how they have the leverage to get that done, and I could easily see that bubble bursting by 2020 (is that when the CSN portion expires?).

      But now, for now, I’m worried. It’s a little harder to explain this away as spin then previous comments, as Kyle said this seems much, much more specific.

  • Wilbur

    I also got the same sense of frustration from Theo when I listened yesterday. I think the Cubs situation looked similar to the Red Sox situation had looked years ago and when Theo took the job. He had strategies to employ he had a lot of confidence in quickly deploying.

    However, things were not exactly the same as Boston and some changes occurred that undercut his initial plans:
    1. CBA changes make it nearly impossible for a team to “outbid” others with over slot payments and quickly build minor leagues. It is now a longer process that requires all the analysis Cubs now do just to not “miss” on draft picks. It also places a premium on “being really bad” at the MLB level.
    2. Working against a large market team like the Cubs (that I would argue had been run like a small market team or a decade) are the compensation draft picks that go to the small market teams. A number of these small market teams combine good analysis with good consistent drafting (i.e., St. Louis, Tampa, etc.). The Cubs small market management approach have resulted in not having Wrigley already upgraded, long missed signage revenue, a growing TV revenue stream, and a dearth of MLB ready talent..
    3. City of Chicago has been a barrier to rapid Cub revenue growth. The City for years saw the Cubs as a gravy train due to the way it was managed, as a profit making division of the Tribune Corporation. The Cubs function for the Tribune Corporation was minimize costs and maximize cash flow to support the losses in the other areas of the corporation. Cub revenue growth will happen as the City government attitude slowly changes, but at a slower growth rate, delays represent lost revenue opportunity. Conversely, in Boston Theo did not have to fight City Hall for changes that would lead to revenue growth. I doubt Theo foresaw the shortsightedness of Chicago’s leaders – the only thing that would have been worse is if Daley the Cub hater was still Mayor..
    4. Cubs and Theo were likely counting on public money, but that just wasn’t to be. Regardless of your position on the pros and cons, if Ricketts’ weren’t going to get public money it certainly put internal pressure on diverting some of the gross revenue to debt service. Even if money is ultimately diverted from debt service it will be an internal budget battle and it won’t come tomorrow and it won’t come fast.
    5. The Cub small market mentality also meant a lot of initial start up costs to “catch up” with with big boys, and that was not only investments in the minor league facilities. It was the time and expense it takes to build out a management team and then beneath that team finding the best scours and technical people to make the plan a reality. Then add the time it takes to overlay that team with the development and roll out of your new data collection and analysis system.

    Bottom line its likely been a grueling 18 months taking an understaffed organization from a 1980’s business model, aging physical plant, and negative local government support and trying to make it best in class … the whole time your being evaluated in the public by the ultimate measure of success, the Cubs won/lost record.

    Yes, I would say Theo is tired, frustrated, and generally earning every penny he gets paid.

    As for Cub payrolls, we’ll never know, unless the Cubs decide they want to tell us. I am always interested in how others estimate how much is going where, but it will always be a guessing game.

    What I would assume though is that future free agent signings are at least as much a function of projected revenue to be gained in future years from new revenue sources as how much is made this year in tickets, vending, TV/Radio, and other revenue. Slower new revenue growth means lower projections in the out years to offset future salary increases.

    If the Cubs are both diverting funds to debt service and not getting new revenue they are in big market team “hell.”

    • noisesquared

      Great post – Lots of good points made. I hadn’t really thought about the lack of public money becoming a hindrance to baseball operations. Meanwhile on the South Side, they can carry their $120-ish mil payroll, while drawing nearly a million less fans in their ‘free’ park. Sigh.

  • http://jjcubs jj

    I”ve been watching these blogs for over a year now and I”ve haven”t read from the fans to renovate the stadium ahead of building a winning team. The Ritters should use the money for better ball players now and I don”t mean out reason types contracts. Put a winning team now instead of waiting for prospects may or maybe not coming of age. Rebuild the stadium around the winning team not the other way around. Over a 100 yrs is enough of patience for the fans. I”m a 70 year fan and heard and seen cubs baseball. Money will not be a reason for waiting, JOE RICKETTS is not going to let his family fail because of money.

  • davidalanu

    I think it was last week when Theo said something along the lines of: “We’re third in our division in payroll, and that’s fine. But we should be first.” When I read that at the time I thought that it was a bit of a shot at the Cubs ownership. Now, with this, I think it’s clear that he’s calling out the Ricketts. I don’t think things are working out the way Theo had been led to believe, whether that’s intentional or the result of the Ricketts having to pay for everything themselves it’s hard to say.

    • BT

      the context of the rest of that conversation was that they need the added revenue from the stadium rebuild in order to be first in the division in payroll, so it’s not remotely clear he was calling out the Ricketts.

  • Michael

    “I can understand why he can’t admit that, even if I do believe that the team was built with sellable assets (and the attending losses) and 2014 in mind, rather than 2013.”

    Can someone explain to me how this team goes from 100 plus losses to competitive by next year? Unless the plan is to spend massively on free agents I dont see it. Lets use the notion that we build around Shark,Ejax, Starlin, Rizzo, and Welly. Then we can reasonably assume Woods and Carlos Villanueva would stay in rotation(if they arent traded). Russells been great for the past 2 seasons. But that still is only 8 guys on a 25 man roster. Its not exactly like the triple A team is spilling over with guys ready to join the team. Someone help me please.

    • http://www.bleachernation.com Brett

      A couple good FA signings and a couple trades – one of which could be for a big-time player – and the further development of some of the guys you named, and boom. It’s important to keep in mind that, when I use the word “competitive,” I’m not talking about an obvious playoff team or a team that is a threat to win 95 games. I’m merely talking about a team that, on paper in Spring Training, looks like a .500ish team that could surprise and make the playoffs. It’s a relatively low bar.

      • Kyle

        I really can’t see it.

        On paper, this is a 75-win team. And that’s with Garza, even though he hasn’t pitched for us yet.

        Next offseason, we’ll have to replace or resign Garza, DeJesus (he has an option) and anyone we trade at the deadline. And it’s brutal, terrible, awful offseason to be buying players.

        We’ll be getting very little from the farm system before September of 2014. Maybe a partial starting season or a full relief season from Vizcaino. You could probably trade Darwin Barney and let Logan Watkins be a poor-man’s version of him. That’s all I see graduating in that timeframe.

        With the apparent payroll restraints, I have trouble seeing us be better than a better version of this year’s “probably not that good, but maybe if we get positive variance” routine. Something like 78-80 wins on paper.

        • http://www.bleachernation.com Brett

          You do realize that I just projected an 81 win team on paper, right?

          • Kyle

            I do now. Reading is fundamental.

            • BT

              Soler and Appel/Gray could easily be ready next April.

              • bbmoney

                I think Soler is a real stretch for opening day next year since he’s still just played a couple weeks in High A.

                Appel and Gray I could see, particularly, from what I’ve read, Appel.

              • Edwin

                Easily? Soler is 21, and in just his 2nd season of pro ball, playing at the A+ level.

                Appel or Gray, as good as they are, would still be new prospects. Even Stephen Strasburg didn’t make it to the Pro’s until the June of 2010.

                There is a very slim chance that Soler and Appel/Gray are ready next April, as in almost 0.

                • BT

                  Literally the first scouting reports I found on Soler after reading your response:

                  “Soler: .304/.396/.500 and should have as line on a starting spot no later than 2014″

                  Put these guys in the “slightly higher than 0 percent” category I guess.

                  Strasburg was drafted as a Junior, Appel should have been drafted last year, but instead went back into the draft. There is also a very real possibility that a September call up will be written into his contract. Gray would be less likely to be ready in April.

                  I’m not guaranteeing anything, but you guys are really underestimating the chances of these guys breaking camp with the team next year. By a lot.

                  • http://www.bleachernation.com Brett

                    Each of Soler and Appel/Gray is very conceivable for mid-2014, but breaking camp with the team is very unlikely.

                    But I think that’s what you’re saying. There’s a *chance.* And there is. Soler’s going to be in AA by July.

                    • Kyle

                      I’ll take the over on a July Soler callup.

                      This front office promotes people slowly.

                    • BT

                      Hey, don’t tell Mr. Spock, but these guys are saying it’s conceivable Soler could be ready THIS year. I have no idea if Cuban prospects tend to move faster than others (Jose Fernandez comes to mind), but I don’t think it’s completely outrageous, given our OF situation, that a 22 year old could make the team in April.

                      And if Appel is who we take, and has it written into his contract that he has to be activated in September in order to start his clock(as many have speculated Boras will try to do), there is no reason he won’t start the season with the team next year (unless he is hurt/completely blows). Gray is a much bigger longshot.

                    • Edwin

                      BT,

                      “there is no reason he won’t start the season with the team next year (unless he is hurt/completely blows). Gray is a much bigger longshot.”

                      The chance that Appel struggles (or especially Soler) is one of the main factors as to why the odds of Appel or Soler starting in April is so low. Prospects struggle, it’s just what they do.

                    • Edwin

                      Brett,

                      Mid 2014 is much more reasonable, but it still depends on plenty of things going right. The chances are still quite low (10%-20%). I’d imagine Appel starts 2014 in AA, and if he does well, he’ll probably get a Sep callup and be a good candidate for 2015.

                      Soler is probably pretty similar. I think he spends this year in A+ and AA, starts 2014 in AA, and if all goes well, AAA with a Sep callup. I think there is a 50-50 chance between him starting 2015 in AAA or MLB.

                    • http://www.bleachernation.com Brett

                      My guess would be those timelines, too.

                      But earlier – especially given Soler’s unique contract, and Appel’s unique advanced development – is legitimately possible. Not sure of the percentage, but it’s high enough that it’s a reasonable conversation.

                    • JulioZuleta

                      I’d be stunned if Soler spends the whole year at A+. I think June is very realistic for his promotion. Sometime in July at the latest. I’d bet on sometime between June 1 and July 10, but I wouldn’t be surprised if it’s a week either side of that timeframe.

                    • BT

                      The guy writes about prospects for a living, and isn’t a Cub fan, but isn’t Kyle, and some guys though Hayden Simpson might be good, so I guess he doesn’t count.

                      And for future arguments, keep in mind who said “easily could be up” (hint, that also means he might not be) regarding a guy who many are now admitting could be playing AA ball by the middle of the summer THIS year, and those that said there is NO CHANCE, when spring rolls around next year.

                  • Kyle

                    Nuh-uh.

                  • Kyle

                    You could link the scouting reports you reference. That would be helpful.

              • Kyle

                Yeah, that’s not happening.

                It fascinates me how Cubs fans have seen this front office be stingy with promotions for a year and a half now and still repeatedly insist that their favorite top prospect is going to zoom up the charts any minute now.

                Soler is not getting three promotions in less than a year.

                Appel/Gray might be ready by Opening Day, but given usage concerns in their first pro season and service time considerations, they won’t be starting at MLB then.

                • BT

                  See above, and it was not written by a Cub fan.

                  You are easily fascinated. Maybe I’ll just start calling you Mr. Spock from now on. Word of warning, sometimes, your endless “fascination” can come off as insufferable condescension. You might want to look into that sometime.

                  • Kyle

                    That’s by design, because I have to deal with fans who think that Soler is going to break camp with the team in 2014 while hitting at A+ in April.

                  • Edwin

                    Could you please give a link to the scouting report? I find it very hard to take any scouting report like that seriously.

                • JulioZuleta

                  Mayyybbee Appel. No way for Soler or Gray. Appel is very doubtful though, he’s not going to come up and dominate, so I doubt they’d start the clock.

                  • JulioZuleta

                    Appel- 15% (that might be high); Soler- 3%, Gray- 1%.

                  • BT

                    again, there is a very real chance WHOEVER takes Appel won’t have a choice as to when they start the clock. It will be part of his contract.

                    • JulioZuleta

                      He’s a college senior. He has very, very little leverage. That’s highly unlikely. Also, even if they call him up for a few weeks in Sept., his clock stops when they send him back down next year…

                    • JulioZuleta

                      And, the team would have a choice because they are the ones offering the contract…once he’s drafted, it’s not like he’s a free agent that can shop offers against each other.

                    • Still Love the Cubs

                      Well Julio, he does have some leverage. He can not sign until the last minute and thus hold all of his pool money hostage so it can’t be spent anywhere else in the draft.

                      That being said, this FO won’t draft him without having a very good idea of exactly how it will go down in the negotiations.

                    • JulioZuleta

                      Everyone has leverage. When you consider his leverage of “I’m not going to sign, play a year in the Indy league making $500 a week, playing in front of 16 people a night, and spening 75 hours a week on a bus, all the while risking injury or inactiviy, and then re-enter a stronger draft next season as a 23 year old,” you see that he doesn’t have a whole lot of leverage at all. That threat just isn’t very real.

                      Also, I’m not referring to his leverage for squeezing some extra money, he may be able to do that. I’m saying that he won’t get the provision that his clock starts in September, unless he sacrifices HUGE money. It just makes no financial sense to a team. Starting him in September would cost the team tens of millions down the road, and years of control.

                    • JulioZuleta

                      Injury or ineffectiveness**

    • TWC

      See 1983 (91L) > 1984, 1997 (94L) > 1998, 2002 (95L) > 2003, and the 2006 (96L) > 2007 Cubs teams.

      • DarthHater

        You left out the 28-game improvement between 1966 and 1967. ;-)

    • Timmy

      An excellent post, Brett, and I also agree with this poster.

      I believe Theo completely when he says this: “The baseball department is spending every dollar that is allocated to baseball operations.”

      Obviously his reputation has taken a major hit here because he’s been caught throwing garbage into the Chicago river these days. The problem is likely ownership looking to increase profit over revenue. The key distinction would be that revenue goes toward the team, profit goes into pockets fo the rich to play with other toys like new hotels. He’s been allocated “x” amount of money and he’s spent it. The team has more money and it’s off limits to operations.

      I’ll reiterate something I said a while back on here that was probably lost in the shuffle. Our new owners have no concept of sportsmanship. Everything’s just business to them. The difference between lovable losers of the past and losing on purpose is intent. The owners intend for or are ambivalent to team losses if it means they earn extra profits.

  • Stu

    What is the average revenue per Wrigley patron, factoring in expected beer/hot dog/etc. consumption? $50? $75?

    Assume that they drop 700K fans because of a bad team that sells all tradable assets by July.

    At $50/patron, that is a hit of about $35M.

    • Kyle

      The most recent estimate I saw was about $75/fan, one of the highest in MLB (similar to our extremely high ticket prices).

      And that’s not even accounting for all the announced attendance that doesn’t actually show up.

    • wax_eagle

      That’s 2 well paid big leaguers a year.

  • Dustin S

    The part that stood out to me was all of the other 4 NL Central teams getting competitive balance picks and 2 having higher payroll. MLB has the books and knows the true income of each team. So MLB is saying the Cubs income is much higher than the other 4 teams, 2 teams do have a higher payroll, but Theo is saying payroll is maxxed. I don’t know who is fibbing, and I know debt plays into it, but I call BS. Either the Cubs are getting the shaft because they are basing the competitive balance on old numbers (and the FO should take it up with MLB), or income is higher than they’re claiming.

    Regardless of tickets sold, even Ricketts commented last year a few times that people in seats are much more important than tickets sold. Other than premium seats and games, concessions and selling merchandise to people actually attending games seems to be where they make a lot of money. A game can sell 38k tickets, but if 15k people are at the game because of the poor product quality…it will be interesting to see how it impacts the bottom line. Truthfully the Wrigley renovations aren’t going to dramatically change that. Wrigley could have $2B in renovations and 38k people aren’t going to consistently show up to see a 60-70 win team. Change jerseys and it totally looks like a small-market KC or Oakland rebuilding team.

  • Stu

    I agree that $2B in renovations isn’t going to change attendance much with a 70 win team. It becomes a silly, circus atmosphere that might actually turn off the true baseball fan.

  • josh

    i think that part of the money “not being spent” is being saved for the deadline. if they are gonna trade soriano, thats 26 mil coming out of the teams payroll in order to trade him. if they want an excellent return on garza they may have to eat a sizeable bite of his contract as well. they might also be gearing up for extensions, rizzo, samardzija, castillo, garza are all possible candidates. they might be putting away money for the posting fee for mashiro tanaka, or a free agent like josh johnson, phil hughes or jacoby ellsbury. we just dont know.

    • Kyle

      That’s not how trading Soriano will work.

      Soriano’s salary for this year is already accounted for in payroll. When they trade him, they will simply continue to pay it.

  • Still Love the Cubs

    I have to agree with Hansman from earlier. Just thinking about all of the deals they were in on (Darvish, Cespedes, Anibal, Ryu, Puig, and I’m pretty sure that I missed something) and they really only came away with Soler and Edwin Jackson from all of that leads me to believe that they money is there IF THEY DEEMED THEY NEEDED IT.

    I do agree that Theo is probably frustrated with the renovation status and that it was assumed that he would get more money sooner. He may even have wanted to go a little higher instead of miss out on some of the above mentioned players. However, I do not think they are completely maxed out at 106 million or whatever their payroll is for this year.

    Correct me if I am wrong, but isn’t it true that most companies have their different departments submit a budget for the operations of that department at the beginning of the fiscal year? Then if needed they can go and ask for more from the upper management? I see it that when Theo says they are maxed out, that he means maxed out on their submitted budget, which they made with a plan in mind. The excess I will agree is being used to service Ricketts debt, pay for renovations, keep as retained earnings, etc. However, I do believe Ricketts when he says that if they needed more money that they could come and ask for it and it would be made available.

    • Kyle

      “they really only came away with Soler and Edwin Jackson from all of that leads me to believe that they money is there IF THEY DEEMED THEY NEEDED IT”

      Epstein directly contradicted that theory yesterday.

      • Still Love the Cubs

        How so Kyle?

        He just said they were maxed out. Or do you believe they really weren’t in on any of these players? I think they just set a limit on what they felt was value for a certain piece and when they didn’t see any more value on the market, they didn’t ask for the money.

        They are not going to spend just because its fun. They are going to try to get value for everything they do. Especially right now while they are rebuilding and the money can be used in other places.

        • Kyle

          Sure, I believe we were in on most of those players. They would have fit it into the existing budget. It wouldn’t be that hard, honestly.

          If they had suddenly needed to come up with another $12m for someone last offseason, they could have not frontloaded Edwin Jackson, traded Soriano (at the $5m/year savings that have been rumored), not signed Hairston and that’s pretty much all the money they needed.

          • Still Love the Cubs

            Point well taken on how they could have rearranged the budget. But do you realistically think that if the baseball ops department felt that they needed to go beyond a budget that they likely set, that Ricketts would have told them no?

            They are doing sort of what the Bulls are doing this year. They knew Derrick Rose was going to be out so they went out and signed a bunch of short term lowish cost deals for mediocre players, biding their time for when they really need to have the money completely freed up.

            I completely agree with you Kyle that Ricketts is using the money for his own purposes (renovations, debt service, etc) and not putting them into the baseball ops department right now. I think that is nearly undeniable. Where I do not agree, is that I think that it is by design and that the FO is in on the plan recognizing the future benefits.

            I have yet to see someone make a convincing argument that there was a deal to be made with a FA or an international signing that the Cubs did not make based on their inability to make the deal. This FO has simply put a specific price on what they perceive is value and they won’t go over that, especially when they are in the midst of a rebuild.

            • Kyle

              Epstein specifically said he spent all the money he had available to him. Trying to find an interpretation where he could have had more money that he didn’t spin is kind of futile.

  • Aaron

    In all, I believe the new Cubs owners are very conservative in their finances and will not put much of their own money on the line to be a championship caliber team in the immediate future. The cost of renovating the stadium, as well as other construction related projects in Arizona and the Dominican Republic, have and will continue to take cash (resources) away from the major league club.

    The process of building a highly competitive team will take a few more years than originally expected. Theo and his team will have to have drafts over the next two seasons that are “home-runs” in terms of acquiring talent that will make the big show within 3-4 years. My concern is that fans in such a major market as Chicago won’t have the patience to wait that long. I understand the Rickett family asking fans to be patient, but didn’t they understand our hunger for a winner sooner rather than later. Is it realistic for fans to have to endure 75-100 losses over the next few years simply because the owner’s don’t have enough resources to do all that is needed in a shorter period to turn this franchise into a winner? Only time will tell friends.

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