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Thursday, January 10, 2008

Daily Herald/Rosner: Is Wrigley sale good for the Cubs?

Prospective buyers will begin to look at the books and notice that without the deed to Wrigley Field, the new owners will immediately lose about $20 million a year in naming rights, which will instead go to the state.

They’ll also add the expense of roughly $30 million a year in rent, which also will go to the state.

The next owner would lose the opportunity to create stunning new revenue streams, an innovative group perhaps finding another $100 million within, and just outside, the walls.

If you’re keeping score at home, that’s about $150 million the next owner loses.

Per season.

The new owner might also lose the land adjacent to Wrigley Field, and probably the Cubs’ share of Comcast.

All of these items shed before the sale of the team will make it more difficult for the next owner to turn a profit, and lest you forget, that is part of the exercise.

Step One: Buy the Cubs
Step Two: ???
Step Three: Profit

Fred Garvin, Collateral Damage Posted: January 10, 2008 at 01:06 PM | 15 comment(s)
Related News: Business, Teams, Chi Cubs

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1. Moses Taylor's bus bench has been Tom Sellecked Posted: January 10, 2008 at 01:41 PM (#2665608)

IMO, the state will not end up buying Wrigley Field. No way. I also think the Tribco would end up with less money if the stadium is seperated from the team.

2. Edmundo is Super Average Man

Posted: January 10, 2008 at 01:44 PM (#2665613)

The new owner might also lose the land adjacent to Wrigley Field, and probably the Cubs’ share of Comcast.

All of these items shed before the sale of the team will make it more difficult for the next owner to turn a profit, and lest you forget, that is part of the exercise.

Hmm, me smart business man. Me no get land or piece of Comcast. Hmm, me bid more to lose money... in Bizarro World, us do it that way.

Or am I missing something?

3. Boots Day Posted: January 10, 2008 at 01:47 PM (#2665616)

The next owner would lose the opportunity to create stunning new revenue streams, an innovative group perhaps finding another $100 million within, and just outside, the walls.

Rosner's just assuming there's $100 million a year waiting to be found lying around Wrigley Field?

Also, I hadn't heard that the naming rights to Wrigley were about to be sold off. Is that true?

4. Toolsy McClutch Posted: January 10, 2008 at 01:51 PM (#2665620)

Yes, it is pretty simple. If the stadium was worth $150 million/year, the group purchasing the team - I'm guessing - would probably offer something more than nothing for it. And almost surely more than the state would pay.

Of course, as a friend of mine likes to point out, journalists tend to be pretty dumb and lazy once they get going. Especially if they're writing about something they know very little about.

5. HOPE: Madison Obamagarner (Flynn) Posted: January 10, 2008 at 02:01 PM (#2665627)

Maybe, but I think Rosner is onto something. Henry and Lucchino would be aghast at the thought of not controlling Fenway Park, and I think you have to look at those two as the best businessmen in the game, considering how amazingly wealthy they've made the Red Sox (and themselves).

To me, not controlling Wrigley Field makes the Cubs much less valuable than they should be.

6. Moses Taylor's bus bench has been Tom Sellecked Posted: January 10, 2008 at 02:02 PM (#2665629)

Also, I hadn't heard that the naming rights to Wrigley were about to be sold off. Is that true?

No. Everyone just assumes that the state would sell the naming rights after they buy Wrigley Field.

7. edoug Posted: January 10, 2008 at 02:16 PM (#2665641)

Who would pay 20 million? The naming rights to near 100 year old, world famous stadiums are worthless.

8. Traderdave

Posted: January 10, 2008 at 02:29 PM (#2665656)

Old Style Park at Wrigley Commons?

9. Boots Day Posted: January 10, 2008 at 03:10 PM (#2665696)

To me, not controlling Wrigley Field makes the Cubs much less valuable than they should be.

Not controlling the Cubs also makes Wrigley Field much less valuable. If there really is $100 million a year to be found in those ivy-covered walls, the new owners of the Cubs would be wise to demand a healthy share of it, or else announce plans to build a new stadium of their own in Tinley Park.

10. Moses Taylor's bus bench has been Tom Sellecked Posted: January 10, 2008 at 03:22 PM (#2665705)

Not controlling the Cubs also makes Wrigley Field much less valuable. If there really is $100 million a year to be found in those ivy-covered walls, the new owners of the Cubs would be wise to demand a healthy share of it, or else announce plans to build a new stadium of their own in Tinley Park.

Agree on the premise, although Tinley Park would be a truly terrible location.

11. SouthSideRyan Posted: January 10, 2008 at 03:34 PM (#2665715)

Agreed on Tinley. If the Cubs are to ever move to a suburb, I'd imagine it's a west suburb. Certainly not to the south, no matter how much my commute would be improved. They'd be idiots to move anywhere else in the first place though.

12. 100 Years is Nothing Posted: January 10, 2008 at 03:44 PM (#2665725)

What the state is considering is buying the stadium for $1, and then spending ~#450 million in rehabbing it, with the new Cub's owner signing a 30 yr lease and using the naming rights to help retire the municipal bonds. Also, they might add to the hotel/meal tax in the neighborhood to help financing as well. I still don't see this happening, but it is not as though the state is going to pay $200 million for the park or anything...

13. The New No. 2 Posted: January 10, 2008 at 04:05 PM (#2665737)

#12 is right about what is being discussed except for one part. Zell would have the Cubs sign that lease before any sale would take place in order to lock them in. That makes the real estate sale much more valuable and it just maybe enough to make up for the reduction in the Cub's value.

14. Shredder Posted: January 10, 2008 at 06:32 PM (#2665827)

Step One: Buy the Cubs
Step Two: ???
Step Three: Profit

Step 2: Hold team for five years, and depreciate half of the purchase price allocated to player salaries. Use "loss" generated by depreciation to off-set other business income.

15. TFTIO Posted: January 10, 2008 at 08:56 PM (#2665874)

Step 2: Hold team for five years, and depreciate half of the purchase price allocated to player salaries. Use "loss" generated by depreciation to off-set other business income.

See "Wolff, Lew".

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Daily Herald/Rosner: Is Wrigley sale good for the Cubs?

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