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Moving to the Burbs...


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#1 Scotti

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Posted 26 January 2014 - 02:32 AM

I'm posting this reply (agreement) to 5412 here because it's late and will get buried in the comments section (1/26 is my wife's and my 23rd anniversary and I may not get here much on Sunday):
 
"Maybe a suburban city or county would pitch in some money..."
 
In what I would consider a weak offer (i.e. there would be much better offers) Rosemont has already offered free land for the Cubs to build upon--roughly 25 acres.  Cities would bend over backwards to bring in the revenue that having the Cubs play in their city would bring.  
 
"...remove the luxury tax..."
 
Rahm has recently had the temerity to discuss RAISING the amusement tax--screwing over CUB FANS.  Rosemont collects a 3% amusement tax (all of that is county tax, not Rosemont).  Rosemont is against taxing it's venues (All-State Arena and Rosemont Theater) and spent years in court fighting the Cook County AT.  Chicago collects a 12% AT (3% for the county and 9% for Chicago).  The difference in 2011 would have been $12.75 million dollars (per year).  As the Cubs raise ticket prices and and Chicago raises it's portion of the AT that cost will only rise (a 20% rise in ticket prices ($54 per ticket)) would mean Chicago would bring in $20.4 million in AT from the Cubs (on 2011 non-sellout figures).  A 2% rise in AT would jack that up to $23.8 million.  Rosemont would just cost $5.1 million (assuming same ticket price increase and same attendance).  That's $18.7 million per year to Chicago/Cook county for absolutely nothing (the Cubs pay for their own policing, traffic, clean up and "neighborhood improvements"). 
 
That's $12.75-18.7 million of what I call "Impossible money" (It would be impossible to get Chicago to lower the AT so the Cubs will never generate that revenue at Wrigley--it's impossible money).           
 
$12.75-18.7 million of impossible money.
 
"Reinsdorf has been quoted as saying he can draw 300,000 less than the Cubs and make more money because he gets parking revenue also."
 
While Reinsdorf is fudging his numbers (the Cubs would make $22.5 million on 300k in gate/concessions at current rates and Reinsdorf doesn't come close to that in parking revenue), the Cubs clearly COULD make $20 million on 1+ million cars parked per year (less than 1/3 of attendees).  Some parking would be closer to the stadium and premium, covered $25 parking and some would be less.  Some optional parking for season's ticket holders could be reserved with name plates (cost factored into the tickets).
 
That's $20 million more impossible money at Wrigley (impossible to replicate in Chicago).     
 
"As far as location goes, I don’t see that as an issue. Put a consistent winner on the field and they will come."
 
And come they will.  Especially if the new facility has zero restrictions on night games (more impossible money in terms of both gate revenue AND ad/TV contract revenue)...  
 
Unknown impossible money but tens of millions.
 
Zero restrictions on concerts (more impossible money)...
 
And a retractable ROOF would allow for zero rain outs (more impossible money), zero lost revenue because it's too damn cold in Chicago to play ball in April (more impossible money) AND concerts, conventions, etc. during the WINTER (more impossible money). A new facility would allow be configurable for football games which would allow Northwestern and other teams to play a game or two there (more impossible money--they tried and the football field didn't fit).  
 
Another "impossible money" situation would be naming rights.  Whatever the new park would be named would be open to naming rights of around $20-30 million per year.  Eventually the Ricketts could sell naming rights on Wrigley--if they win a World Series or two (TR could walk down Michigan Avenue naked with bells on if he won a World Series).  The value of renaming Wrigley wouldn't be anywhere near what they could get for a new park (the Sears tower folks literally (and I mean literally) GAVE those rights to the Willis folks--Sears, Wrigley, etc. are already too branded to have much value to re-brand).  While the Cubs are branding areas in and around Wrigley, they would do this at a new facility as well.  That sub-branding at Wrigley itself caries--for now--more cache so say...
 
Net $15-25 million per year impossible money.   
 
Yet another impossible money comes from expanding the current seating capacity.  Wrigley is the second smallest venue in baseball, yet when they are competitive, they nearly sell out (they WOULD sell out with more night games and a roof).  ADDING another 4 k seats would still keep the Cubs venue cozy but allow for 324,000 more fans (assuming just 75% fill rate = $19 million more impossible dollars (at 20% increase in ticket price), gate and concessions profits, per year).  There is simply no way to cram more seats in Wrigley.  
 
$19 million more in impossible money.  
 
Re. where Cub fans come from anyway...  From a study the Cubs did, 1/3 come from out of town (i.e. nowhere near Chicago and are spending the night somewhere).  1/3 come from the burbs--mostly the NW burbs.  The remaining 1/3 come from Chicago--mostly the north side.  
 
Given that, we see that 67% of Cub fans in attendance at the game make one hell of an effort to get there (Wrigley is a bitch to get into--even from most of Chicago--unless you take public transportation and folks just don't have the patience for that).  It is stunning how many people put forth such an effort to get to the ballpark.  Day games during the week don't make that any easier for people coming from work (unlike most teams and their night games/easy parking, you have to take off at least half a day to get to Wrigley and attend a typical day game).  
 
Very few Cub fans who attend games could, rightly, be called casual fans.  Certainly Brett's save one--lose ten equation is hyperbole. 
 
As to another myth, Cub fans do not come primarily to see Wrigley.  If that were true, you wouldn't see Cub fans in droves at other parks--often seemingly outnumbering the home team's fans (certainly in tenacity and devotion).  The Cubs are typically 3rd or so in away attendance with even a marginally competitive team and 1st or 2nd with a ("divisionally") competitive team.  Cub fans are CUB fans.  Wrigley is a perk.  When it isn't an albatross (i.e. impossible money and ties to the Machine).   
 
So we are left with the advantages of Wrigley:
 
It is located in Chicago so folks already visiting, or living in, Chicago can easily visit the ballpark provided they don't mind public transportation.  
 
It is nostalgic for Cub fans who may wish to revisit the park/neighborhood.   
 
There IS an element of fans who come to party.  Mostly in the cheaper seats but it does exist to some degree (though less and less as ticket prices rise).  
 
Then there is the fact that Wrigley is owned--a used car that needs fixing as someone alluded to.  Wrigley reconstruction "only" costs $300 million (plus $200 million in surrounding construction that is necessary afford the the Wrigley reconstruction so it must be included in costs).   So "only" $500 million (these are all sunk costs) whereas new park would cost a billion (plus).
 
However, a huge chunk of those costs would gladly be borne by any of the Villages of Rosemont, Arlington Heights or Schaumburg (I see no other legitimate contenders), for bringing an economic cash cow like the Cubs their way (not to mention the national advertising for the village's brand).   
 
Let's assume the new facility (plus land, etc.) cost $1.4 billion (let's do this right (the facility the Super Bowl will be played in cost 1.6 but stuff is costlier out east).  That's $900 million in loans/bonds/what-have-yous more than Wrigley.  Assuming the Cubs can get something for Wrigley, the McDonald's property, what little parking they own and a few other buildings (let's say $50 million for the lot of them ((the business value of said properties plummet when the Cubs move)) that brings that total down to $850 million extra.  
 
How much of that burden would be borne by the Cubs and how much by a burb?  Well, Mesa, Arizona just coughed up $99 million for a mere 16 (SIXTEEN!!!) home Spring Training games--just 20% of the 81 home games the Cubs play for real (actual, honest MLB games that COUNT) with no possibility for addition revenue from playoff games.  You likely would never have heard of Mesa had the Cubs not played in "Beautiful Mesa, Arizona" 16 times per year.  That free advertising has propelled their growth far passed the rest of the area (which is also expanding but at a slower rate). 
 
Whichever of the villages that would win the Cubs would pay WAY more than $99 million.  Say they pay half of the difference (in bonds, property, etc.) so $425 million (well UNDER the prorated $ amount that Mesa is paying per game--DC paid over $600 million to build the Nationals facility).  That means the Cub share of the additional amount would be $425 million.  The Cub's "impossible money" above clearly pays for an extra $425 million loan (the impossible money above is way over $70 million per season and the majority of it is virtually pure profit (parking, less AT, more seats, night games/roof increasing attendance, ad buys, TV revenue, etc.).   
 
Simply put, this isn't the 0.01% odds that Brett gives to it.  Again, hyperbole.  TR prefers Wrigley.  Good on him.  But, if the Wrigley situation doesn't improve, he isn't going to bend over and just take it.  And neither should Cub fans.  We finally have an owner who wants to do big things with the team.  We've sat around doing nothing while the Tribune had NO debt (team or ballpark), no rent and shuffled the books to prop up the Trib (TV and radio contracts anyone) all to make the Tribune executives meet quarterly projections (for failing industries).  We were told that the Cubs were a tiny part of the Trib assets.  And we--as Cub fans who make all of this possible--were provided with the 15th to--at best--7th highest payroll 2000-2008.  
 
Demand more.  As Cub fans demand more than what we accepted from the Tribune.  Demand more than what we accepted from the city of Chicago.  Wrigley is 100.  It was nice.  My grandma was nice, too.  We buried her.  If Chicago doesn't step up, if the rooftops don't take a step back, then enjoy Wrigley's 100th year and make plans to move out of Chicago to a city (village) that knows how to partner with business.       


#2 OCCubFan

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Posted 26 January 2014 - 05:33 AM

Yes. Yes. Yes. Very well stated.



#3 MichiganGoat

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Posted 26 January 2014 - 07:58 AM

Okay your Ricketts you know you can make more money with less headaches if you move, BUT do you want to be the man that moves the Cubs out of Wrigley? Do yiu want to be the man that during it's 100th anniversary moves the team? We might be okay with it because we've obsessed over all this drama but to the casual or even devoted fan that does follow blogs like we do this is a horrible idea. This is unforgivable. To many Wrigley symbolizes (regardless of for good or bad reasons) everything the Cubs represent- a team that respects the pure nature of baseball- a holy shrine of baseball. So how would you like to be the person that destroys the temple?

It may not be a financial benefit to stay in Wrigley but there is a reason to stay.

I'd admit my willingness to move has dramatically increased in the last few weeks, right now I'm close to 50% but a few months ago I was maybe less than 10%, and that's because I've followed this story so closely for two plus years I just want it to end. Ricketts is a business man but he's also a real Cub fan that understands what Wrigley represents and is fighting to preserve that history. I be curious how this lawsuit plays out in the next couple months.

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#4 OCCubFan

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Posted 26 January 2014 - 08:08 AM

Your points are excellent. If Ricketts is a good businessman (probably true), then he is willing to make tough, unpopular decisions if that is best for the long run. Similarly, Epstein has said repeatedly that he will not do anything to jeopardize the long-run health of the Cubs just to please impatient fans or sportswriters (or message board posters??).

 

I do not have sufficient information to determine whether moving is in the best interests of the Cubs. I suspect all of the major issues pro and con have been raised on BN. I hope Ricketts does the best thing--whatever that might be.



#5 scorecardpaul

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Posted 26 January 2014 - 08:13 AM

I agree, I also think baseball stadiums are cheaper to build than football stadiums.  I'm thinking the Braves new future stadium has a price tag of around 675 million.  I also think ownership could make additional money if when they moved to a new location they bought extra land around the stadium.  There is land available that is large enough to fit a new stadium, parking, outdoor plazas, hotels etc.  The value of the extra land would increase enough after the purchase simply because of its proximity to the new field.  They could make a ton of money selling off land they don't need.



#6 scorecardpaul

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Posted 26 January 2014 - 08:21 AM

another point that is never discussed is this....

How much money could the Cubs make if they tore Wrigley Field down and sold all of the pieces?

I would think at the minimum they could sell each seat for $100.  I would think they could sell everything, even down to the individual bricks, lights, dugout benches etc.  I would be amazed how much money they could probably make off of the demolition of that old piece of falling down building.  I understand supply and demand. but you can't buy a Wrigley seat today for less than $500.  I have seen all kinds of Wrigley stuff sell for over a grand.  There are a ton of Wrigley Field collectors out there with crazy money.  I know I would have to empty a few accounts to go to that auction.



#7 Luke

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Posted 26 January 2014 - 11:10 AM

another point that is never discussed is this....

How much money could the Cubs make if they tore Wrigley Field down and sold all of the pieces?

 

The gross would be high, but I'm not sure about the net.

 

A couple guys and a wrecking ball can knock down Wrigley in a few weeks if they aren't trying to preserve anything.  If they try to pull out anything sellable, we're talking a much larger crew and a longer period of time.  The cost to destroy goes up.

 

I think there would be a net, but I'm not sure it would be a hugely significant net.



#8 Brett

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Posted 26 January 2014 - 12:01 PM

We don't agree on much in there, but I do enjoy the obvious effort and thought that went into this. Enjoyed the read.

 

One thing I want to be clear on: saying that a huge number of casual fans come to Wrigley, as it presently sits, is not about them "coming to see Wrigley" and not the Cubs. The 10-1 thing was obviously hyperbole, but the point is: a huge number of people come to see the Cubs in their present location for the entirety of the experience. It's a thing to do in Chicago (where, particularly during the day, there are vastly more people to entice to come than in one suburb - the market is centralized, and there isn't the same bottlenecking trying to bring people to, for example, one outlying suburban area; how anyone who has driven around Chicago for more than 10 minutes can ignore this point befuddles me. At least make note of it.). 

 

Again: it isn't just "Wrigley" that the casual folks (corporate groups, man - they are a huge base) come to see. It's the entire Wrigley, Wrigleyville, proximity experience. Move to the burbs, and that vanishes. Then who comes? Serious fans and northern suburbanites. No one of any casual bent is going to make the treck to the burbs, especially on a weekday.



#9 Scotti

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Posted 28 January 2014 - 02:55 AM

We don't agree on much in there, but I do enjoy the obvious effort and thought that went into this. Enjoyed the read.

 

One thing I want to be clear on: saying that a huge number of casual fans come to Wrigley, as it presently sits, is not about them "coming to see Wrigley" and not the Cubs. The 10-1 thing was obviously hyperbole, but the point is: a huge number of people come to see the Cubs in their present location for the entirety of the experience. It's a thing to do in Chicago (where, particularly during the day, there are vastly more people to entice to come than in one suburb - the market is centralized, and there isn't the same bottlenecking trying to bring people to, for example, one outlying suburban area; how anyone who has driven around Chicago for more than 10 minutes can ignore this point befuddles me. At least make note of it.). 

 

Again: it isn't just "Wrigley" that the casual folks (corporate groups, man - they are a huge base) come to see. It's the entire Wrigley, Wrigleyville, proximity experience. Move to the burbs, and that vanishes. Then who comes? Serious fans and northern suburbanites. No one of any casual bent is going to make the treck to the burbs, especially on a weekday.

 

Thanks, enjoy a place to have freewheeling discussions.

 

"...and there isn't the same bottlenecking trying to bring people to, for example, one outlying suburban area; how anyone who has driven around Chicago for more than 10 minutes can ignore this point befuddles me. At least make note of it."

 

Traffic in and around the various burbs mentioned is like a ballet compared to the moshpit of getting into Chicago (and, FWIW, getting INTO Chicago at 5PM is no picnic--rush hour goes both ways now as folks in the city have found jobs in the burbs).  Seriously, there can be improvements but, as someone who is in and out of Lincoln Park and downtown on a regular basis, the burbs flow in comparison.  Even All-State Arena (Rosemont) or Arlington Park (Arlington Heights).  Schaumburg has the state's busiest mall by far (WoodField Mall) averaging over 70k per day and JAM PACKED during the holidays--it flows.  I live three miles from the Mall, drive to Rosemont 3-4X per week and drive by the racetrack several times per week as well.  It flows like hot butter around here compared to getting to Wrigley.

 

The bottle-necking occurs when you have no easterly access into Wrigley, no major streets equipped to handle the traffic anyway and no parking to speak of once you get there.  Again, as a person who lives each of these trips multiple times per week at all times of day, there is simply no comparison.    Each of the three locations that I could get behind has major access from multiple, local highways.  

 

Re. corporate tickets.  Corporate ticket sales don't just come from the city.  In fact, there are numerous corporations outside the city and a quick peek at the top 20 publicly traded corporations in the area shows that 14 are headquartered in the burbs (all fortune 300 companies).  These are companies like Walgreens, Allstate, Motorola, Kraft, Sears, Baxter, McDonald's, Abbott Labs, Discover...  Monsters of industry.  Monsters that would buy more tickets of the Cubs were easier to get to.  I mean, over in the comments section, die hard fans are giving die hard fans tips on how to shave ten minutes off their commute.  This isn't what your "casual fan" does.  He just casually doesn't go.   

 

My wife's company--a mid-sized specialty staffing company--buys tickets all of the time, too (a hundred or so a year).  Just like hundreds of companies their size, they would buy MANY more tickets (for employee functions and for Sales to use) if the Cubs were easier to get to.  They actually buy 50-50 Cubs/Sox because the Sox are simply easier to get to.  If the Cub's new stadium were 5-15 suburban miles away?  They'd more than quadruple their buy and it'd be 90% Cubs (Sales would still be stuck taking Sox fans to the Cell).   



#10 Scotti

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Posted 28 January 2014 - 03:03 AM

 

another point that is never discussed is this....

How much money could the Cubs make if they tore Wrigley Field down and sold all of the pieces?

 

The gross would be high, but I'm not sure about the net.

 

A couple guys and a wrecking ball can knock down Wrigley in a few weeks if they aren't trying to preserve anything.  If they try to pull out anything sellable, we're talking a much larger crew and a longer period of time.  The cost to destroy goes up.

 

I think there would be a net, but I'm not sure it would be a hugely significant net.

 

 

Unfortunately the landmark designation means no one touches Wrigley.  My guesstimate is $50 million for Wrigley, the (formerly) $20 million dollar McDonalds, the few empty parking lots they own, the triangle property and the corner building.  Huge losses, but major gains elsewhere.   



#11 Scotti

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Posted 28 January 2014 - 04:19 AM

Yes. Yes. Yes. Very well stated.

 

Appreciated.  You mind if I show this to my wife?  I think if she practices, she just might get it down.  



#12 Scotti

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Posted 28 January 2014 - 04:33 AM

Okay your Ricketts you know you can make more money with less headaches if you move, BUT do you want to be the man that moves the Cubs out of Wrigley? Do yiu want to be the man that during it's 100th anniversary moves the team? We might be okay with it because we've obsessed over all this drama but to the casual or even devoted fan that does follow blogs like we do this is a horrible idea. This is unforgivable. To many Wrigley symbolizes (regardless of for good or bad reasons) everything the Cubs represent- a team that respects the pure nature of baseball- a holy shrine of baseball. So how would you like to be the person that destroys the temple?

It may not be a financial benefit to stay in Wrigley but there is a reason to stay.

I'd admit my willingness to move has dramatically increased in the last few weeks, right now I'm close to 50% but a few months ago I was maybe less than 10%, and that's because I've followed this story so closely for two plus years I just want it to end. Ricketts is a business man but he's also a real Cub fan that understands what Wrigley represents and is fighting to preserve that history. I be curious how this lawsuit plays out in the next couple months.

 

I agree that he is in no hurry to be the guy who moved the team.  He'll only do it if his hand is forced and certainly not the 100th anniversary of Wrigley (now, the 101st...).  

 

I WAS very surprised at how quickly he moved to threaten down in Mesa (Daytona). Tens of thousands of Cub fans have retired down their just to see the Cubs (Cubs had been down there for a very long time as well).  When he was working my grandfather would spend all of March down in Scottsdale just to see the Cubs.  TONS of folks like that all over that place.  

 

Ultimately Ricketts didn't pull the trigger.  Was he ever really going to?  (The guys in Daytona were guys he knew).  Mesa woke up and knew what was good for them.  I'm thinking Chicago is too messed up to ever get it together on this (that and Rahm has so little clout right now).  

 

Re. the temple...  Just win, baby, just win.  Winning covers a multitude of sins.  But, he isn't winning.  Sucks to be him, right now.  



#13 Patrick

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Posted 28 January 2014 - 05:03 PM

This is the best laid out argument I've seen on the subject, and it's almost convincing. For me, it's just not quite convincing enough. I think there is an overestimation of the net profit from selling Wrigleyville properties. I think there is also an overestimate of the potential for additional revenues from non-baseball use of the stadium. Allstate Arena, Sears Arena and the Stephens Convention Center are already under booked (although less so for Allstate Arena). I also think that Parking would absolutely be a huge profitable benefit to the land owners, but I think part of any municipality's offer is going to include significant profit-sharing from parking concessions. Finally, I don't like the Mesa comparison because the facility is a year-round use facility.

 

Again, it is a very convincing argument that when you subtract the unrealizable profit from the attendant expenses of a new ballpark, moving is not nearly as financially implausible as one might think. It's a point I haven't really considered before and I appreciate you laying it out in the way you did, but I'm still not convinced, even using your numbers, that the Cubs wouldn't be substantially better off staying in Wrigley Field, renovating (er expanding) it in the way they plan, and building a winning team. But I now have a different way of looking at things to think that if they can't do that renospantion (expavation?) exactly the way they want, maybe moving isn't such a bad idea after all.



#14 5412

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Posted 28 January 2014 - 06:16 PM

Hi guys,

 

I suggest you take a look at the CSN breakdown of the Cubs contract with the owners.

 

http://www.csnchicag...ooftop-contract

 

While Brett is the attorney, it look like the Cubs have the right to "expand" after the first five years and there is not a damn thing the rooftop owners can do about it.  Yes they can sue an who knows what happens there.  I think the deal was also arbitration which would be much faster than going through the court system.

 

We need to remember the "Godfather" for the rooftop owners was Mayor Daley (sox fan) and the local alderman.  If you go by what Kaplan's sources say about the contract, the Cubs are within their rights to do as they wish under the name of "expansion" unless the city or court tells them to stop.  When the City passed the law allowing the Cubs to do what they need to do, it was a major milestone, including the wording of the law.  My guess is that is why they applied for the permit, that strengthens their case even further.

 

The rooftop owners are playing a game of chicken and hoping for a shakedown.  If the courts or city sides with them then the Cubs will likely be forced to move.  At the same time, it would take intervention by the city when the agreement expires or the rooftops are gone anyway.  I suspect the rooftop owners are not looking long term, and could care less about the team on the field.  By the time the team gets good their deal is likely sunk anyway.

 

I don't think the rooftop owners being a pain in the ass is helping their situation one bit.

 

It will be interesting to see how it shakes out.

 

regards,

5412

 

PS:  I have had several conversations with Tom Ricketts.  I agree, given a choice he would prefer to stay with Wrigley.  The guy has to have incredible patience, or at least not show the public the level of frustration he must be feeling.  



#15 Patrick

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Posted 28 January 2014 - 07:03 PM

Maybe Brett will do a whole post on the front page about it. ;)




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