Insight into Cubs' future business plans


Earlier this week, I wrote about Cubs general manager Jed Hoyer's admission that diminished attendance over the past few seasons has hurt the baseball budget.

The reason attendance is down, from 3.3 million in 2008 to 2.64 million in 2013, is because the Cubs are purposely putting together a bad product on the field as they reallocate money to the minor leagues and abroad. It's a catch-22, Cubs style, and who's to say when the organization will start spending on the major league club?

I wasn't going to write more on this issue until something new happened -- like the long-delayed announcements on new radio and TV deals for 2015, not to mention the renovation issues -- but then I saw a Forbes tweet about an interview with Cubs president of business operations Crane Kenney and owner Tom Ricketts.

So I watched and thought there were some interesting tidbits about the future of the team's media rights and the ever-rising costs to rebuild Wrigley Field.

Kenney and Ricketts spoke to the show "Forbes SportsMoney," and I highly recommending listening to the full interview and reading the accompanying story.

Let's start with the attendance story. Kenney spoke about transitioning from working for a publicly traded Tribune Co. ownership to the privately held Ricketts family and how their long-term vision should be heralded. He thinks Ricketts shows "courage" by lowering payroll and losing paying fans while they pursue a long-term plan.

"Attendance has gone from 3.3 to 2.7, with a lot of fans choosing to wait or do something else with their discretionary dollars," Kenney said to reporter Mike Ozanian. "It takes courage to say we understand that's going to happen. We would never tell people how to spend their money. If they think this isn't a product worthy of their money, they can choose that."

Kenney notes "it hasn't exactly been a picnic" as far as media and fan reaction during the past few seasons of losing baseball "despite telling fans you're going have to trust us and stay with us." He did add the Cubs have seen "amazing" support from the fans who do understand their plan.

The most interesting part of the interview was when Ozanian asked if it were "plausible" to say the Cubs would get the biggest TV rights deal when their full package expires after the 2019 season. (The WGN portion of the Cubs' TV deal is up after this season, while the Comcast SportsNet Chicago deal has five more seasons.)

"Yes, I think it's plausible," Kenney said. "The question for all of us is how will people consume media at that time? Right now, you look at cable -- most teams look at cable or a distributor as partner, like Fox or Time Warner or Comcast. We're seeing the evolution of people going over the top. It's a matter of when someone like Google says we're going to be [a] bidder for rights, because we're going to take these games to consumers in a different way."

Kenney pointed out Yahoo, Apple and Netflix as examples of companies producing web-only content.

While you delight in imagining 80-year-old Cubs fans being told to buy some Google TV subscription to watch the Cubs, Kenney also said a more traditional Cubs RSN (regional sports network) is a "likelihood."

"There are a few brands with brand equity to carry their own channel," he said. "You've seen some fail, but I think our brand is big enough carry a channel on its own."

Of course, Kenney's boast about landing the biggest deal is bad news for cable customers. Chicagoans will be paying for the Cubs' massive TV deal with increased cable fees. Sorry, White Sox fans, you'll be paying, too. It also means Cubs fans will probably get blacked out as the team, the RSN and the distributor work out a deal. Vin Scully can't get the Los Angeles Dodgers RSN at his house.

Ricketts' interview was less interesting, but he admitted the Wrigley Field renovation, which hasn't started yet, will cost "north of $350 million, probably closer to $375 million," with an additional $150-$200 million to build the hotel, plaza, etc. Earlier estimates were $500 million for each.

Who knows? By the time the renovation finally starts, we might be watching the construction, steel beam by steel beam, on a special Google subscription channel.