SBD/June 16, 2011/Franchises

Ricketts Says Cubs' Debt Won't Limit Signing Of Free Agents This Offseason

Ricketts cited weather, economy as reasons for drop in Cubs' attendance
Cubs Chair Tom Ricketts addressed the media yesterday "after weeks of conspicuous public silence in the face of rising heat over his management team and team finances," and he said that GM Jim Hendry's job "is safe and the team's debt won't preclude signing free agents," according to Gordon Wittenmyer of the CHICAGO SUN-TIMES. The Cubs reportedly are one of "nine teams not in compliance with Major League Baseball debt-service rules," but Ricketts said it is a "non-story." He added that the debt-service rule issue is a "function of the terms" of his purchase of the Cubs and that the commissioner's office "is satisfied with the Cubs' financial condition." Ricketts: "What every fan should know is that nothing in the capital structure, in the balance sheet or any of the debt will in any way limit our ability to put a good team on the field." Wittenmyer notes Ricketts "refused to get more specific than that about the player-spending issue, saying the decision to commit a multiyear free-agent contract at eight figures a year is up to" Hendry. He "declined to say whether payroll would be cut for the third consecutive winter." Meanwhile, Ricketts responded to MLB Network and NESN analyst Peter Gammons recently calling Wrigley Field a "dump." Ricketts said, "Obviously we don't believe it's a dump. ... That said, we know that it can be improved. We know we've got a lot of work to do to preserve it and improve it for the fans." Ricketts added of the team's drop in attendance, "There are a couple of factors -- obviously the economy and obviously the weather, but the most important thing is I'm not worried about the attendance because if we win, we'll be full" (CHICAGO SUN-TIMES, 6/16). ESPN CHICAGO's Sahadev Sharma notes the Cubs have "nearly $40 million in expiring contracts coming off" the team's payroll at the end of the season. But Ricketts said, "Even if we knew where (payroll) was going, we wouldn't talk about it. We don't talk about payroll" (ESPNCHICAGO.com, 6/15). In Chicago, Paul Sullivan notes some have argued the Cubs "need to bring in a seasoned baseball executive to replace President Crane Kenney at the top of the front office and oversee Hendry." But Ricketts said, "I've never bought into the (idea) that I should have a baseball guy to watch my baseball guy and his baseball guys" (CHICAGO TRIBUNE, 6/16).

ON THE BRIGHT SIDE: Ricketts on CNBC yesterday said, “The commissioner came out and the league is completely comfortable with our debt structure. The Cubs are an investment grade credit. The important thing people have to know is that nothing in our debt structure and nothing in our balance sheet is in any way affecting our ability to put a team on the field. It's really just a technicality driven by the structure of the transaction and nothing more than that. There's nothing to worry about.” Meanwhile, Ricketts said, “Obviously, the Cubs do have one of the highest payrolls in the National League and one of the highest payrolls in all Major League Baseball and we haven't gotten the kind of performance on the field that we were looking for.” He added, “We’re working on the organization as a whole,” investing in Spring Training facilities in Arizona, development facilities in the Dominican Republic and “doing everything to build a better organization” (“Closing Bell With Maria Bartiromo,” CNBC, 6/15).

NOT A CAUSE FOR AMUSEMENT: In Chicago, Melissa Harris reports after a "routine audit that covered years when" Tribune Co. owned the Cubs, Cook County notified the team that it "owed as much as $1.5 million in back amusement taxes, plus interest and penalties." Sources said that the dispute "centers around amusement taxes on Wrigley Field's approximately 65 luxury suites." Cook County reduced its request to "about $570,000 and is awaiting a ruling from the bankruptcy judge." The county has also "begun an audit of amusement tax payments under the Ricketts regime." The Bears have "encountered the same problem" with the 133 suites at Soldier Field. Sources said that the team is "protesting its larger amusement tax bill and is awaiting a ruling on the dispute from an administrative law judge." Harris notes a county ordinance states that "admission-related fees are subject to the amusement tax." But what is in dispute is "when parking, food and other amenities are included in a luxury suite bill -- as they sometimes are at Wrigley and Soldier fields." Cook County "contends they are" subject to the tax (CHICAGO TRIBUNE, 6/16).
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