SBJ/20100329/SBJ In-Depth

‘We don’t believe in curses or billy goats.’

Amid the frenetic revamping of the entire Chicago Cubs organization, a process that includes restoration of Wrigley Field, a new spring training complex in Arizona, and a range of marketing plans, there is perhaps an even more sweeping change in the Windy City.

New team owner Tom Ricketts has absolutely no tolerance for “Lovable Losers,” for years the well-known, unofficial moniker for the club, and the name that has come to define everything about the Cubs’ historic ineptitude.

“I don’t believe in ‘Lovable Losers.’ Never have,” said Ricketts, whose face grows visibly discomforted at the mere mention of the words. “You’ll never hear us put those two words together. And we don’t believe in curses or billy goats. It’s just not what we’re about.”

Ricketts, who with his family purchased the Cubs, Wrigley Field and related assets last year from the Tribune Co. for about $845 million, may be rebuking the Curse of the Billy Goat, the famed 1945 legend that marks the team’s last World Series appearance. But in reality, he’s trying to overcome more than any alleged curse. Ricketts and his family inherit one of the crown jewels of the entire sports industry, but also a franchise badly in need of modernization and attention in nearly every key area.

There is no dispute the Cubs are a widely beloved institution. The club has drawn more than 3 million people to Wrigley Field — generally considered one of the most popular ballparks anywhere along with Fenway Park, Yankee Stadium and Dodger Stadium — each of the last six years, and holds a strong national following thanks in part to its distribution on WGN-TV.

But Wrigley Field fell in visible disrepair during the latter stages of the Tribune Co.’s three-decade ownership of the team. And even as new business ventures such as corporate signage within the famed outfield wall ivy were occasionally pursued, and night baseball arrived to Wrigley under Tribune’s control, the club struggled mightily with developing a systemic operational plan that would meet present-day challenges while also building for long-term success.

The new ownership quickly got to work sprucing up
96-year-old Wrigley Field.

“Tribune was a good owner, but they were too tied to [financial] analysts and to the stock. There were some natural constraints,” said Cubs President Crane Kenney, who ran the team for Tribune Co. and has been retained by the Ricketts family in a new four-year contract.

Kenney was one of about 100 full-time employees working for the Cubs that, during the Tribune days, represented the smallest front office in baseball. The Ricketts family has since boosted the count by more than a dozen people. “In many ways, we were starved for capital, particularly for non-revenue projects. We were given plenty of resources for payroll. But getting capital for other things that didn’t necessarily have a direct return was much tougher.”

All that has dramatically changed in a few short months, with the remaking of the Cubs now standing as perhaps the most important and prominent story of the 2010 MLB season.

The arrival of the Ricketts family has prompted an aggressive plan to revamp the 96-year-old Wrigley, with the first phase of work featuring a new, PNC Bank-sponsored club area done this past offseason. It will culminate in 2014 with the opening of a six-story, 400,000-square-foot building adjacent to the ballpark to house team offices, premium space, a team museum, hotel, retail shops, restaurants and other areas.

Ricketts retained the services of Cubs
President Crane Kenney (left) and brought
in marketing veteran Wally Hayward (right).

Plans to build a new spring training complex in Mesa, Ariz., though now hampered by political division within the Arizona statehouse and the Cactus League, call for the construction of what would essentially be Wrigleyville West.

And the club has begun to alter how it communicates with the public, with the family making a high-profile appearance during the Cubs Convention in January, vowing to be a visible presence at the ballpark and to the media, and launching a new marketing campaign called “Year 1” that acknowledges the club’s historic roots while firmly outlining the new era’s beginning.

“This is basically a 125-year-old startup,” said Wally Hayward, the former Relay Worldwide and Chicago 2016 executive who was hired in November as the Cubs’ chief sales and marketing officer. “The brand needs to be dusted off a bit, but we’re going to get to the point where we’re the innovators.”

On one level, the story of a new owner coming with a bold new plan is hardly new. But this one involves the iconic Cubs brand and, interestingly, includes no Daniel Snyder-type bluster. There have been no mass firings, no senior leadership changes thus far aside from the addition of Hayward and extension to Kenney, and no nasty and public repudiation of all that has come before. Instead, this story involves the relentless development of a blueprint to get the Cubs their first World Series title since 1908 and revive the franchise top to bottom.

“If baseball didn’t prohibit us from buying into more than one franchise, I’d want stock in the Cubs,” said Boston Red Sox President Larry Lucchino. The Red Sox and their renaissance under the management of Lucchino and owners John Henry and Tom Werner have served as an important blueprint for Ricketts and the Cubs. “They have some tremendous opportunities in front of them, and the extra advantage of following our game plan to some degree.”

From bleachers to boardroom

Tom Ricketts, 44, looks the part of a typical MLB owner, often attired in a conservative suit and tie, and his background is also fairly typical of that elite group. Raised in Omaha, Neb., his father Joe founded and ran the highly successful national stock brokerage TD Ameritrade.

Tom, the second oldest of four children, left Omaha in 1984 to attend the University of Chicago. After graduation, he stayed in town and worked as a market maker for the Chicago Board Options Exchange, later earned his MBA, and ultimately built his own sizable wealth through his co-founding and running investment banking firm Incapital.

Offseason work improved Wrigley’s
notoriously spartan concourses. Crews
also removed many concrete panels on
the exterior facade to improve brightness
and airflow.

His background in the financial services industry belied a deep passion for baseball, and much more importantly to Cubs fans, genuine stripes as a diehard Cubs fan. As a youth, Ricketts played Little League and frequently attended games of the local Triple-A Omaha Royals. After college he lived in an apartment in Wrigleyville, the lively, bar-heavy neighborhood around Wrigley Field. As a frequent Bleacher Bum, he met his future wife, Cecelia, at Wrigley. And it was once again at Wrigley where Ricketts convinced his family, particularly patriarch Joe, to rally around his idea to bid for the team.

“Tom’s got street cred,” Kenney said. “We got very lucky. He’s got some scar tissue. Had the [sales] process gone another way, who knows?”

His passion for the Cubs would be firmly tested during a marathon sales process that lasted more than two years.

After real estate mogul Sam Zell purchased the Tribune Co. in early 2007 in a massive $8.2 billion deal, Zell quickly rehung the for-sale sign on the Cubs, Wrigley Field, and an interest in Comcast SportsNet Chicago. But that’s where the simplicity ended. Efforts to separate the franchise, stadium and media assets and sell them in distinct transactions predictably fizzled, but still took many months to play themselves out.

Various rounds of bidding for the Cubs assets occurred, and during many of those phases, the Ricketts family was not publicly seen as a bona fide favorite, in part due to a deeply concerted effort by the family and its advisers to stay out of the press. Tribune Co. then filed for bankruptcy in December 2008, further complicating the sales effort and helping extend the entire process to 30 months once it was all done.

Team officials, too, suffered under the strain of the process, even as the club continued to stay competitive on the field. “There were definitely challenges. It’s hard to add staff, for example, when your parent company is in bankruptcy,” Kenney said.

One of the many projects at Wrigley that won’t
provide any direct revenue is repairing
brickwork along the left-field line.

Tom Ricketts estimates that due in part to the complex legal structure of the deal, one in which Tribune Co. remains a minority owner, he signed his name more than 6,000 times at closing.

“There was a year or so in there where all I received from friends was condolences,” Ricketts said of the many low ebbs during the saga. “But I never lost faith. I never lost faith because at the end of the day, it was still an auction. The best bid had to win.”

While dollars, and the financial structure fueling those dollars, won the day for the Ricketts family, fellow executives and friends say the family’s deep love for the game immediately showed and will pay huge dividends going forward. Tom Ricketts is spending 40 hours or more each week working on the Cubs, while maintaining a limited presence with his other ventures. He intends to be at every home game.

“They know what a treasure the Cubs are, I’ve seen their plans, and the early returns so far are good,” said MLB Commissioner Bud Selig, a lifelong Milwaukee resident who has held a close view of the Cubs’ operations during his 40-year baseball career. “You can’t really run a successful team without a passion for the game, and they definitely have it.”

Building boom

Wrigley Field all winter was a furious din of construction activity. Everywhere one looked, construction crews of all types were hard at work. Concourses were cleaned and expanded. Bathrooms were completely renovated. Six tiny, cramped suites were combined to create the PNC Club. Brickwork was redone in several sections. A new, albeit temporary, Wall of Fame was constructed. Players facilities were upgraded. A new batting tunnel, visible to fans, was constructed. The iconic scoreboard was refaced. Ugly concrete panels lining sections of the exterior facade were removed, providing more openness and natural light in the concourses.

Beyond raw construction, many new amenities were planned for the 2010 season, such as concession stands serving healthier bison meat from a Colorado outfit, High Plains Bison, controlled by the Ricketts family.

As the new owner of the Chicago Cubs, the Ricketts family should first focus on …?
Source: Turnkey Sports Poll conducted in February by Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal. The survey covered more than 1,100 senior-level sports industry executives spanning professional and college sports.

The net goal amid the varied projects was, as much as possible, to inject significantly more freshness, space and modern amenities into what remains a cramped, aged ballpark.

“There is not one corner of the building that’s not being touched,” Tom Ricketts said. “Between our closing in October to Opening Day was a little over five months. So the attitude was, ‘Let’s see what we can do.’”

An even bigger view, however, exists with the Triangle Building, essentially an annex to Wrigley that’s been discussed on and off for much of the past decade. The planned structure, somewhat resembling the Green Bay Packers’ Lambeau Field Atrium, would give the club a true annual presence, allowing for events throughout the year and a far better space to celebrate the team’s history, tragic as it may be. Several hotel companies have already expressed their interest to be part of the project. And the project would finally get team employees, some of whom work in trailers outside of Wrigley, into proper office space.

Financing has not been set, but early cost estimates have hovered around $100 million, above and beyond a similar number budgeted for the ongoing work in and around the ballpark. The current building schedule calls for planning and approvals this year, and formal construction ongoing during 2012 and 2013.

The Triangle Building would be the centerpiece of a “Project 2014” campaign that would tie into the 100th anniversary of Wrigley Field, and if the Cubs get their way, also include the All-Star Game played at Wrigley that summer. That year, as it stands now, is an American League year in the All-Star Game rotation used by the league, but MLB has shown in the past a willingness to bend those rules as desired.

“We want this to be the best place in baseball,” Tom Ricketts said. “By 2014, we want people to say that not only has the history of Wrigley Field been preserved, but also looks forward and gives them something more.”

Plans call for using this site adjacent to the
ballpark for a six-story building that will house
team offices, a team museum, shops and
other areas.

The situation 1,700 miles to the southwest in Mesa, Ariz., is not nearly so straightforward. The Cubs are the foundation on which the entire Cactus League operates, with the team successfully parlaying its 57-year history in Mesa and broad national appeal to easily the best attendance in Arizona, home and away, each March. But its current facility is also falling into disrepair, and in January, the club struck a preliminary deal with Mesa and state officials on a new stadium, practice facility and mixed-use development, beating out a fervent counteroffer from Naples, Fla.

But that Mesa plan, involving $84 million in public-sector funds, would employ a ticket surcharge on all Cactus League games to raise the money, a move that has raised howls of protest among the other MLB teams that train in Arizona.

“It’s a catch-22 situation. We don’t want the Cubs to leave. We want them here, but we are all opposed to this tax,” said Derrick Hall, Arizona Diamondbacks president and CEO. “It’s not us against the Cubs. The Ricketts seem like great people, really committed, and I think they’ll be fabulous owners. It’s us against the Legislature, because this measure doesn’t make any sense, and I fail to see how the numbers add up.”

Advocates of the bill, however, claim that the ticket surcharge would supply far more than what is needed in Mesa and create a larger pool of money to help fund future spring training projects for other teams. Still, MLB and the other clubs remain active in trying to amend the bill as it weaves through the Arizona Legislature, pushing instead a tax-increment financing structure. The Cubs have the ability to back out of the deal if the Legislature doesn’t approve the project by July, or if the pact is voted down in a referendum.

History of Cubs ownership
1876: Owner William Hulbert and the Chicago White Stockings are one of eight charter members of the National League. Hulbert also serves as league president.
1882: Former White Stockings pitcher and team President Albert Spalding, co-founder of A.G. Spalding sporting goods company, assumes ownership after Hulbert’s death.
1902: Team president James Hart buys the club from Spalding, who steps down to concentrate on his sporting goods business. The team changes its name this year to the Chicago Cubs.
1905: Former journalist and New York Giants executive Charles Murphy buys the team for $125,000 with the help of a loan from Cincinnati Times-Star owner Charles Taft.
1914: Taft pays $503,500 to Murphy for the club.
1915: Charles Weeghman, a former team owner in the Federal League, and nine others purchase the Cubs from Taft for $500,000.
1921: William Wrigley Jr., one of the shareholders with Weeghman, buys out the remainder of Weeghman’s share of the club. Philip K. Wrigley assumes control after his father’s death in 1932. In 1977, William Wrigley takes control after his father Philip’s death.
1981: The Tribune Co. buys the club from the Wrigley family for $20.5 million.
2009: The Ricketts family closes on a deal, valued at $845 million, to purchase the franchise. The deal comes 2 1/2 years after the Tribune Co. put the team, stadium and broadcast interest up for bid. Tom Ricketts will serve as board chairman.
Source: SportsBusiness Journal research

“I want to get that solved,” Selig said. “We’re trying to find alternatives. We’re trying to work through the options, and I want to get it done. I understand clearly what the Cubs mean to Mesa and the whole league there.”

Remaking history

The roots of the Cubs’ firm win-first attitude predate the arrival of the Ricketts family. The hiring of manager Lou Piniella in late 2006 helped substantially reset the organizational tone, with the veteran skipper guiding the Cubs to two playoff berths in his three seasons in Chicago, providing the club’s first three-year streak of winning seasons since a six-year run from 1967-72.

The Ricketts family, however, has heightened expectations, and last year’s Opening Day payroll of $135 million, third highest in the league, could serve as a baseline going forward as they intend to stay aggressive on that front and have pledged to plow profits back into the team.

On top of retaining Kenney, Tom Ricketts firmly charged his team president to find the best possible executive for the sales and marketing role, eventually landing Hayward. The Cubs have a new chief financial officer and new general counsel coming in early April, but neither has been publicly named. Another important recent hire was Jahaan Blake, who joined the club in late February to head up fan experiences, a new position firmly aimed in part at addressing Wrigley’s spotty reputation in customer service. The club also hired Kevin Saghy to oversee marketing and business public relations, also a new role, and he will be communicating the Cubs’ off-field and charitable endeavors.

Tom Ricketts, Kenney and Hayward are each sacrificing personal wealth and other career aspirations to work for the club. And considering Hayward’s new office at Wrigley is a converted women’s rest room and Tom Ricketts’ own ballpark office was also being constructed during the offseason and shoehorned into the cramped ballpark, the job does not necessarily offer all of the finest perks.

“There’s ultimately one goal: Win the World Series,” Kenney said. “That’s an incredibly unifying, galvanizing thing. We have a chance to remake history. Wally, me, everybody, could have taken other jobs, probably for a lot more money, but this is an opportunity to be part of something truly special. When we win, the only thing I think will be comparable will be Lake Placid.”

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