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Money[In lieu of traditional Bullets today, I’ll be giving you four bulleted pieces on the primary four topics from this weekend’s Cubs Convention – the resource issue, the renovation issue, the TV issue, and the player/prospect issue(s) – since that’s really the meat of what’s going on right now. And, since I was there, I’ve got a fair bit to share on each.]

If you could sum up the mood of this weekend’s Cubs Convention in a single word, it would probably be “subdued.” Sure, folks were still happy to be there, and sure, it was still a fun atmosphere for crazy Cubs fans. But it didn’t seem to have quite the same … pop as years past. I suppose that’s understandable, given the team’s performance the last five years, and the lack of a headline-grabbing offseason.

To the latter point, if you could sum up the one question that seemed to be on a huge number of fans’ lips this weekend, it would probably be something like, “Yeah, I get that developing the farm system and acquiring waves of young impact talent are the best way to sustained success in the long-term, but why isn’t the big league team getting any infusions of help?” At almost every panel, however tenuous the connection, you saw a variation of this question asked by someone. And, since answering that the new CBA encourages tanking is not a realistic response to a group of your customers, Cubs owners and executives did their best to explain why payroll has been falling at the big league level, and why nothing of note has been done in that regard this offseason.

The issue has played itself out in the media in recent weeks – the Jeff Passan article was actually referenced directly by a fan in one of the aforementioned questions – with a relatively clear divide forming: some believe Cubs ownership is simply not giving the front office the resources it needs to rebuild the big league roster at the same time it invests heavily in the minor leagues. Others (spoiler alert: me, based on a long financial piece on which I’m working) believe a unique and thoroughly Cub-like confluence of circumstances make spending lavishly on big league payroll significantly difficult right now (and, frankly, outside of Masahiro Tanaka, there haven’t been a huge number of great investments out there to make on this team right now anyway).

So … what’s up? What was the product of those many questions at the Convention? Is the front office getting the resources it needs to rebuild the best way it sees fit?

  • When asked directly about the perceived weakness of Cubs ownership and their failure to spend commensurately with the market to put a more attractive team on the field, Theo Epstein was pretty firm in his response. “The best thing about the Ricketts and their commitment to the Cubs is that they know they’re going to own this club for generations and generations. They’re willing to take the hit now and take some of the heat now [and the] criticism because they know they’re doing the right thing …. I am more proud of them for their willingness to take that heat and stick to their plan than I would be if they panicked the first time their name was dragged through the mud publicly and said, ‘We can’t do this, put lipstick on this, and we need to find quick fixes to keep the fans and the media at bay.’ They are in this for the long haul. They’re giving us the ability to lay the foundation.” That’s one way to remind folks that, as frustrating as 2012, 2013, and (probably) 2014 have and will be, there is a very long view being put in place here.
  • Epstein, in response to a question about Tanaka, but without referencing Tanaka explicitly, explained that the lack of moves to this point in the offseason could be in part because the Cubs were waiting for a chance to spend the money where they really wanted (“left some of our powder dry”, I believe is how he put it). The implication was pretty clearly that the front office wasn’t interested in any of the major free agents this offseason at their expected prices except Tanaka … but also that the money may not have been there if they had wanted more than one impact free agent.
  • When Scouting and Player Development Chief Jason McLeod was discussing organizational resources as it relates to scouting, he was fairly dismissive of the idea that they aren’t getting what they need. Indeed, he emphasized that, as part of the Cubs’ organizational philosophy, they give scouts every resource they need to “dominate” their area. That could always be fluff, but it was a plain denial that scouts are being short-changed by ownership. It wouldn’t make much sense to pin your hopes on a ground up rebuild and then cut the knees out from the guys at the bottom of the pyramid.
  • Team owner and chairman Tom Ricketts confirmed that the team’s significant debt does impact the bottom line on spending, but claimed it was not as significant as some have made it out to be. Instead, Ricketts implied that the reduced payroll spending was partly tied to many other expenses. “The fact is there are other things we’ve had to spend money on. We’ve had decades of under-investment in the park that we’ve had to address. We had one of the smaller front offices in baseball and the smallest baseball organization in baseball. We’ve added 102 new associates to build out what is now an average-sized organization. So there are a lot of expenses that come in over the last few years.”
  • At the business panel, business president Crane Kenney made sure to re-emphasize the Ricketts’ long-standing public position that every dollar that comes in the door is put back in the organization. To me, it seemed as though Kenney wanted to make very clear that the Ricketts Family is not pocketing profits produced by any increases in revenue, decreases in payroll, or a combination of the two.
  • In the end, this was pretty clearly an anticipated talking point for all parties, and they were on the same page: revenues aren’t where the Cubs want them to be, and when they are, there will probably be a lot more spending. But, per all sides, the front office is being given the resources it needs to build the organization in the way it wants to, so the fact that there isn’t as much money coming into the organization yet as there is going to be (TV/renovation) isn’t an impediment right now. Is that a convenient explanation for a consistently crappy big league team that costs a whole lot less money? It is. But it is certainly plausible that the organization’s temporary inability to generate as much revenue as is needed to support a $140/$150 million payroll coincided with the front office’s vision of a tear-it-down-to-the-studs rebuild, which necessarily includes reduced big league payroll. Whether you buy that coincidence probably depends on the predisposition with which you entered the conversation. (As always, the truth is probably somewhere in the middle.)
  • So, to the chicken or the egg question of spending to win or winning to spend, we didn’t get a clear answer. But, as Sahadev wrote on Friday, if the Cubs spend huge money on Tanaka, it’s a pretty reasonable signal that there’s an expectation the “spending” is going to come in the next couple of years, probably in advance of the “winning.”
  • Diehardthefirst

    Did anyone ask how Sveum hiring fit into planning for the future? Appears he was set up as stop gap until a more seasoned teacher could be brought in as was done with Renteria? If is true then what other moves have been made for the only purpose being to hold until the grand plan blossoms? And when do we see these flowers? Hope such questions were asked and answered so fans can know if what we see now is the mulch or the bud?

    • scorecardpaul

      I’ve never been fortunate enough to be able to go to a Cub Convention, but if they take questions from fans then we should take up a collection and send diehard. I can only imagine the look on some of their faces when diehard asked a question

  • BenW

    I do give ownership some slack, as they are trying to do a lot to get this team off the ground. Renovations, new staff, facilities in other locations, etc. They won’t have to do that every year, so paying for it up front makes good sense.

    That being said, signing a guy like Tanaka (let’s just use 20 million a year), isn’t a total dollar for dollar loss. He would sell gear, bring in additional ticket revenue (which in turn, brings in more money from Wrigley field vendor sales), etc. So, if a FA makes sense on the team, they should be all over them. I do think they will bid highly on Tanaka, and only lose if the market + lack of wins is too much to overcome.

  • blublud

    I wish people would get off the FO. I like what they are doing and I am starting to see a slight light at the end of the Tunnel. I think this season, as the hump season, will be the transition. I really don’t care about the lack of spending as far as payroll goes. If we win with a 20 mil payroll, who cares. There is only one signing that the Cubs didn’t make that I feel they should have. Choo would have Been a great fit for this team, but I guess he priced himself out. We are fine people. This years team will surprise many people and be pretty competitive. And there will not be another year go by that the Cubs “can’t” spend money.

    • itzscott

      I also like what the FO is doing and remain 100% in support of them doing what desperately needed to be done yet was never even attempted.

      I still challenge those who complain about the lack of spending to lay out who they would have signed or could have acquired that would have rounded the team out to be a legitimate contender. There was no one, two or three players that could have done that as there have been too many holes to fill.

      For me, the crossroads will come when the anticipated prospects begin filtering into the regular lineup, further needs become apparent and what this FO does to address them.

      But that isn’t now.

  • BenRoethig

    We’ll know if Theo thinks he’s being given the resources in 3 years.

  • Jon

    I had to chuckle at Ricketts analogy about your neighbor watching your TV through the window. Actually, Tom, if you signed a contract that allowed your neighobr to do so, provided he paid you, then yes, you would be in trouble if you didn’t honor that contract.

    He just strikes me as the spoiled little rich shit from the suburbs that always gets his way.

    • fortyonenorth

      What I parsed from the many tweets and reports is that Ricketts’s said the hold-up in renovations was based on demanding assurances that the rooftops would not sue AFTER the contract expires. So, in this context, his comment would be apt.

      • Jon

        Well, everything reported, even on this site, is that a threat of immediate lawsuit(and injunction) could stop construction. And that’s the holdup. I don’t know how they could sue with no contract in place.

        • fortyonenorth

          That’s what’s been reported, but I don’t think the cubs ever said that. They’ve been consistent in their “threat of lawsuit” language, but I think the rest is a logical conclusion drawn by reporters.

    • http://waittilnextyear.net NateCorbitt

      But what if the previous owner of your house was the one who signed that contract? Would you be ok with it then?

      • Jon

        That’s really irrelevant. If you know of that contract up front when you buy that house, it’s something you have to deal with.

        Again, not trying to defend the rooftops, they suck, and can’t stand they are holding this crap up, but a contract is a contract and Ricketts analogy was poor and really off base.

        • mjhurdle

          without actually knowing what is in the contract, i’m not sure any of us knows whether his analogy is off-base or not.

          • Jon

            ? At a high level, we know the rooftops pay a % of their revenues to Cubs for access to views of the field.

            Ricketts analogy

            “You are watching Showtime, your neighbor watches through your window, invites others and charges them, you close the shade and the city makes you open them”

            No that is a poor analogy and ignores the major fact that you(or previous homeowner) signed a CONTRACT with your neighbor.

            • Jon

              Jesse Rodgers called this dumb analogy out, I wish more of the beat guys would as well….

            • mjhurdle

              “At a high level, we know the rooftops pay a % of their revenues to Cubs for access to views of the field”

              How do you know this? What level of views is guaranteed? what changes are allowed? What aren’t?

              I could see the analogy working. If I (or the previous owner of my house) sold the view from my living room to the house across the street. But when they sold it, they made no allowances from when I wanted to shut my curtains for privacy, or to block the sun or something of that nature. Now me and the neighbor are arguing about the definition of what views they are allowed.

              Like I said, it could be a horrible analogy, it could be an ok one. Without knowing what is in the contract, it is impossible to say, even with vague “high-level” assumptions being made.

              • bbmoney

                Your problem is with the previous owner. Or whoever you had doing your Due Diligence work before the purchase.

                You should have known these issues before you bought the house. Once you buy the house you’re bound by the contract. If you weren’t clear on the terms of the contract before you purchased the house that’s not your neighbors fault.

              • Jon

                Then explain it in more detail like it, then the way he did. (“hey my neighbors are stealing my Showtime!”)

                It makes him looks petty.

            • Diehardthefirst

              Explains why Ricketts success tied to dad- this is first major venture on own and he’s cutting his teeth which is painful to watch- eventually he will grow out if this and act maturely like for instance just ignore them and move on- the park was just fine without a Jumbotron and adding one wont make game anymore enjoyable- in fact all that advertising and visual takes away from the relaxing atmosphere the game was supposed to be- this is not football basketball soccer or hockey- quit trying to change the experience

              • CubFan Paul

                “this is first major venture on own and he’s cutting his teeth which is painful to watch”

                InCapital…

                • Jon

                  more than likely, start up that was funded with a large % of “family money”

                  • roz

                    Which is different from actually running the start up.

                • aaronb

                  Which was basically a lemonade stand he set up in his Dad’s lobby.

            • http://fullcount1544.blogspot.com FullCountTommy

              The problem is we don’t know the language of the contract. Continuing with the house example, what if you put up a mesh screen that partially restricts your neighbor’s view. Is this completely obstructing your neighbor’s view and thus violating the contract. We can’t sit here and speculate without knowing the exact verbiage of the contract.

              • Jon

                Except, in his little analogy, Ricketts makes no mention of any contract, which is a kind of a big “deal” in this whole thing.

                “Imagine signing a contract with your neighbors with views to your yard, and said neighbors won’t let you upgrade your property by leveraging grey area of this contract”

                is a more appropriate, educated way of describing it than

                “These jerks are stealing my cable!”

                • half_full_beer_mug

                  My problem with your outrage is that the contract was only signed after the city told them to open up the blinds.

            • Scotti

              “…you close the shade and the city makes you open them”

              Seems your entire critique of Ricketts’ analogy is missing the fact that, as half_full_beer_mug said, the city forced the issue with the rooftops. THAT was Ricketts’ analogy. And, hell yes, he is right! Any self-respecting Cub fan (and I mean that literally) should be mad as hell at the way the city has dealt with the Cubs.

              • Jon

                Except that never happened.

                This disupute began over 10 years ago when the Cubs and rooftop owners because to argue he bleacher expansion, as the rootops were concerned about their views being blocked. This triggered the on the grounds the rooftops were stealing their product. Then they hung the screens. When they agreed on the 17% revenue sharing, the screens game down. So, no, the city never said “Open the shades”.

                The Cubs would have likely won in court and could have kept their shades up if they wanted.(except it was kind of pointless, they were ugly, and just there ‘in spite’) They agreed to take them down in exchange for revenue.

                • Jon

                  Sorry about that, autocorrect mess on phone

                  This disupute began over 10 years ago when the Cubs and rooftop owners began to argue he bleacher expansion, as the rootops were concerned about their views being blocked. This triggered a lawsuit by the Cubs on the grounds the rooftops were stealing their product.

                • Scotti

                  “Except that never happened.”

                  “Then they hung the screens. When they agreed on the 17% revenue sharing, the screens game down. So, no, the city never said ‘Open the shades’.”

                  And what kind of support was the City giving to the Cubs? A) The Cubs wanted to expand (a simple overhang in the bleachers). B) The City refused to allow that expansion UNTIL the Cubs worked out an arrangement with the rooftops. C) The Cubs worked out an arrangement with the rooftops.

                  So, yeah, that happened. In your own words the Cubs would have likely won in court. What stopped them from proceeding? The City holding permits over the Cubs head. Chicago simply has an historically onerous relationship with the Cubs that no other city has with a team.

                  Boston wants to shut down some streets? No problem. The WHITE Sox want a new stadium? You betcha. The Cubs want an overhang in the bleachers? Sorry, you need to resolve your legal issues with the rooftops first.

      • bbmoney

        As long as I knew about it at the time so that I could factor it into the price I was willing to pay for the house….sure.

    • itzscott

      >> He just strikes me as the spoiled little rich shit from the suburbs that always gets his way. <<

      Yeah, that's kinda the way he comes across as much as he tries not to. I just can't get Mike McCaskey out of my mind when I look at him and hear the way he strings his words together.

      BUT, it's so much easier for us to hit a target with a face to it than one that doesn't….. would you rather have an identifiable person or some faceless corporation to vent at?

    • roz

      What was the context of the quote? If he was talking in general terms, he’s right, it basically is like your neighbor peeking through your window. If he was talking about specifically when they were in the middle of a contract to allow the rooftops to do that, then yea, the analogy is dumb.

      • aaronb

        I liken it more to buying a house that has a homeowners association. You can whine about it if you want. You still owe the dues.

  • Diehardthefirst

    If number one on Ricketts mind is the Rooftoppers then the team is not being cared for properly- a contract must be honored and move on- focus on making the product on the field so good that those that visit the roofs will want to watch their next game sitting inside the park

    • http://www.bleachernation.com Brett

      There’s an entirely separate discussion coming for the renovation stuff, folks.

  • bleedingcubbieblue

    I can say one thing for Theo an Co.: They’ve got me interested in the entire Cubs product. Under Hendry I only thought about the ML roster. Aside from that I didn’t have a clue of who was in the system, but I heard hints about these rising prospects named Patterson and Pie. When they made the big league roster I found out who they were. I loved the offseason because I didn’t just have to dream about theses superstar FAs that might wear Cubbie blue. If he wanted them he could get them. Until last season I’d never even heard of signing a flappable FA. What was that? Thanks to Brett I’ve got a much better understanding and now I realize that a lot more goes into the FO activities then just trading prospects for big name guys and spending a butt-load of money that’s not mine on the FAs we want to see playing in October.

    On a totally unrelated note: I was counting the jerseys with the name Smith on them during the NFC Championship game last night. There were a lot. So I started thinking, can you assemble an all-Smith baseball team from players of all time. I had my shortstop (Ozzie), my closer (Lee), and my RF (Dwight).

    I also tried Jones and came up with Chipper at third, Andruw in centerfield, and Jacque in right field. Rodrigues also got me three guys in a closer (K-rod), a 3B of A-rod, and a LF with Henry.

  • CubFan Paul

    “the organization’s temporary inability to generate as much revenue as is needed to support a $140/$150 million”

    It doesn’t even have to be that high. That’s the problem.

    No one is advocating crazy spending, but $105Mish is a joke, even if the debt services are $30MM a year.

  • VittersStartingLF

    I for one am glad they aren’t throwing money at free agents who are or will be past their prime in the next few years. Because we won’t be saddled with all these big contracts for players that will decline, we will have money in the future to get pitchers in the free agent market to supplement all our young hitters. I envision that pitching could be 2/3 to 3/4 of our budget in a couple of years. I’m all for giving Tanaka a huge contract as well as allocating funds to sign one or two of the top free agent pitchers next winter. Other than Tanaka, I don’t see anyone worth the big contract this year. Next year with the possibility of Bailey, Masterson and Scherzer, we need to save funds for them. The good news is we can afford to buy pitching because all of our hitters will be cost controlled for several years. I think FO is doing an A+ job.

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  • Diehardthefirst

    The undercurrent is Buyers remorse- if he could have done it over he would have done it differently – he led with his heart and not his head- how often does he get to sit in the bleachers now?

  • Ivy Walls

    Tanaka signing fits many angles. A 25 yr old accomplished starting pitcher needs no development or risk as signing a college/HS draftee or Intl FA at 16 yrs old, yet you are signing him onto the big club as he emerges at his prime. It also is a marketing pivot point that can satisfy the big spenders, where skybox 81 game purchasers could have an audience with him etc., plus it is a good narrative. It also allows the narrative to carry over onto other FA contract efforts.

    The winning part is still being developed and I am going to have the chance to see 6+ games this year with Iowa Cubs in Colorado Springs, (late April weekend and late June weekend when am going to go to all four games). Hopefully that weekend could be interesting as Alcantara, Hendricks, Baez and others are about to be brought up OR Bryant has continued to mash the system and is brought up. I will always recall when Geo Soto smashed a game-winning HR over the CF scoreboard before he was called up. Soto was playing 1B that game but immediately you could see the difference between a future MLB player and a AAA pretender.

  • TommyK

    The relevant question isn’t whether the Cubs have the ability to spend “lavishly.” The question is whether they have the ability to spend like an average major league baseball team, because they are not doing so. It’s not about getting payroll to $140 million. It’s about getting the payroll to $90 million, which it won’t be unless they get Tananka. I wouldn’t have minded seeing the Cubs get someone like Granderson, put him in left, move Lake to center, and have a starting outfield that doesn’t make me want to cry. I’m not saying that move would make them a playoff contender, but me not crying every time I look at the outfield has to be worth something. And Granderson could be a nice veteran presence next year when the kids should be called up..

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  • ChiMike702

    The Ricketts family has the only business model on earth where they want to grow their business without investing money into and people support it. Boggles my mind.

    • http://fullcount1544.blogspot.com FullCountTommy

      $500 million into a renovation, big money into a Dominican academy, the most money spent on international signings this past season, but no, they don’t spend any money. Educate yourself please, there are a lot more aspects to a Major League organization than just the Major League roster

      • ChiMike702

        Renovation and the money to buy the team comes out of team profits.

        • ChiMike702

          After the initial down payment to purchase the franchise of course.

      • DarthHater

        Oh, Tommy, you just don’t understand the complexities of a comment model that grows opinions without any factual basis or semblance of logic.

        • http://fullcount1544.blogspot.com FullCountTommy

          haha this made me lol darth, well played

  • Diehardthefirst

    Their solution to revenue issue may lie in Bitcoins. Did you know that on p. 94 of Megatrends paperback Naisbit predicted this would replace money- book was written 1982

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