The Curse of Wrigley?

Is the pending sale of Wrigley Field to the State of Illinois a good idea?

Somewhere in the heavens above, you can hear Harry Caray screaming “Holy Cow!” The thought that the Cubs landmark facility, Wrigley Field, could be named anything but is unfathomable. It has stood the test of time, as far as any baseball facility can. From “Wildfire” Schulte & Victor Saier to Alfonso Soriano & Derek Lee, this grand ballpark has seen it all, except a World Championship.

Not once in its 94-year existence have the hometown heroes brought home the coveted championship banner. This anomaly has been blamed on anything from goats to humans who interfere with balls in play. Cubdom has always had a reason for its beloved teams’ failures.

Yet, maybe another curse is at work: the Curse of Wrigley Field.

With the announcement that Wrigley Field is going to be potentially sold off as a separate entity from the Cubs as a bargaining chip to make more money, has Wrigley Field worn out its welcome?

Should the Cubs and Tribune have been looking at options to renovate earlier or to build a new stadium? The Mayor of Chicago, Richard Daley, has already threatened to shut the facility down due to public safety concerns of falling concrete.

Yet, the mystique and innocence of an original old-time park still has fans and owners wanting to fully utilize the life cycle of this ageless facility. If fans still love the ballpark and it is functional, why not utilize it to your advantage?

That’s exactly what the new owner of the Tribune Company, Sam Zell, plans to do.

Sam Zell & The Tribune

In December of 2007, a deal was finalized where Zell, a real estate mogul, would purchase and be named the new Chairman of the Tribune Company.

Key holdings involved in this deal were the Chicago Cubs, Wrigley Field, a 25 percent share of Comcast SportsNet Chicago, and Wrigley Field Premium Ticket Services, Inc.

Also included in the buyout was $13 billion of Tribune debt—debt that Zell now needs to clean up. It has been estimated that the sale of the aforementioned assets could reach $1 billion.

Not a bad chunk of change to help the cause, especially when the owner has no interest in running these side businesses of the Tribune.

Zell set the beginning of the 2008 season as the initial timetable to sell the Cubs and Wrigley Field. For such a complex deal, Zell was pushing the envelope to get this done fast.

The Tribune Company had already been trying to sell the Cubs months before the buyout had occurred without any luck. This actually helped Zell to be optimistic, as there were already buyers lined up who had submitted their applications to Major League Baseball for approval.

To Zell it then became, how do I get the most money from this sale?

One would think that this sale would include all of the assets described above, but an idea of separating them and piecing them off came about. The thought was that, if each asset’s value were maximized, the lump sum would be greater than if they were sold as a group.

A key player in this is the Illinois Sports Facility Authority, a government agency whose purpose is to construct and renovate professional sports stadiums in the state of Illinois.

ISFA & The Sale of Wrigley

The ISFA was created in 1987 by the state of Illinois and Governor Jim Thompson to help keep the White Sox in Chicago by building a new stadium on the south side of town.

They obviously succeeded and now continue to maintain the home of the White Sox, U.S. Cellular Field. The ISFA has also been involved with the restoration of the Chicago Bears’ Soldier Field and construction of the United Center, home of the NBA’s Bulls and NHL’s Blackhawks.

Their main goal is to maintain these professional sports facilities at no expense to local residents. In negotiating for the purchase of Wrigley Field, they are again trying to not issue any taxes on local citizens or use state revenues for the purchase and renovation.

The plan is to first, issue tax-exempt bonds to the public that would be paid back by using the lease payments from the Cubs’ new owners as part of a 30-year lease.

Second, create a special taxing district around Wrigley Field, in which sales-tax money going to the state would be frozen at current rates with new revenues being used to help cover renovation costs.

Hey, wait. Isn’t the main goal of the ISFA not to use public money? Yet the first two options actually do.

The argument for the first option is that the money will be paid back in time and not cost the purchaser of the bond anything. But at its core, it still is using public money, right?

As far as idea two, how much money could this make? If rates will be frozen, how many more people are they expecting to spend money in the district to make a surplus that could be used for the stadium renovation?

The Cubs’ virtually sell out their games already; by renovating the stadium will more people spend more money outside of the park?

Finally, the big deal as far as baseball fans are concerned, is the naming rights deal. This deal has been projected by Zell to be worth as much as $400 million. He is using the new deal between Citigroup and the New York Mets as a benchmark. That deal will make the Mets $400 million over 20 years.

Unfortunately for Zell and the ISFA, finding the sponsor is the hard part. The likely deal would have to insist that the Wrigley name still be attached, thus decreasing the effect of the naming.

As a business owner, would you want to be the one who took the Wrigley name away?

If somebody would still go ahead, the most likely scenario would be to use a name such as, “Wrigley Field at company abc Plaza.”

That certainly does not have the same recognition Citigroup gets with Citi Field. Thus, expecting $400 million is a bit of a stretch.

Back to the impending deal, the money from the proposed naming rights deal would be reinvested into the stadium and help pay for the needed renovations. These renovations would enable the state to operate Wrigley for the next 30 years of the newly created lease.

The amount of renovations is still being discussed, but rumors are projecting a cost around $350-400 million.

Included in the renovations would be upgrades to many areas of the park including repairs to breaking concrete, food service facility upgrades, adding luxury suites, widening of concourses, new parking, and improvements to team clubhouses.

When will the Cubs be sold?

With all of the talk about the stadium and naming rights, what seems to have been lost is the fact that the Cubs are still for sale.

Originally planned to have been sold by this point, the Cubs remain under the control of the Tribune Company and look to be for the foreseeable future.

Crane Kenney, the senior vice president of the Cubs, announced in January that bids for the Cubs would not be accepted by Sam Zell until the Wrigley Field sale is finalized. This pretty much ensures that the Tribune will operate the Cubs at least until the middle of this season and most likely until the end of the 2008 season.

In the meantime, will the potential buyers like what is currently transpiring?

Surely the purchase of the Cubs without Wrigley Field is not as intriguing. The new owners would be paying rent to maintain a park and not be able to reap any benefits from it. This issue of controlling park revenues could scare away potential buyers.

These are the Cubs though, and owning them is pretty prestigious. Thus, even if a few drop, Zell is still expecting serious offers. Mentioned prospective owners include John Canning Jr., Mark Cuban, and the Ricketts family.

Looking Forward

Can this proposal work? There are an increasing number of skeptics that are opposing any such deal. State legislators from the Senate and House of Representatives have voiced their opinions on the subject.

They mention that with the problems of today’s economy, the thought of a state spending money to refurbish and purchase a baseball stadium doesn’t sound too appealing. Money should be spent on items that are of a higher priority, such as Medicaid.

However, a few legislators such as House Minority Leader, Tom Cross, are keeping an open mind and haven’t made a decision. The idea that taxes not be involved in the deal is key to any approval.

Another roadblock for Zell and the ISFA is the historical landmark status of Wrigley Field. Any renovations to the ballpark must be approved by the city.

Mayor Richard Daley is skeptical of these proposed changes and looks to be standing against any proposals. The thought of changing the park would take away from its historical status, as the park would have been modernized.

However, Daley has yet to completely rule this idea out.

If everything happens to be approved and Wrigley Field is renovated, what is the plan to move forward? Could the Cubs continue playing while Wrigley is renovated?

Since the ISFA already owns U.S. Cellular Field, the rumor has circulated that the North and South-Siders would share this facility while Wrigley is renovated. The renovation would most likely begin after the 2008 season, and continue through to the middle of the 2009 season with the Cubs splitting time with the Sox for half a season.

This would be an intriguing social experiment. Could these two storied franchises and their loyal fans coexist together? Would the Cubs outdraw the Sox in their home park?

Conclusion

The long tradition and uniqueness of Wrigley Field may have run its course. In the modern age of baseball, there unfortunately is not much room left for aging stadiums that don’t provide sufficient revenue streams.

We have seen other landmark stadiums go into the history books in recent years including Tiger Stadium, Cleveland Municipal Stadium, Comiskey Park, and after this season, Yankee Stadium.

Wrigley is part of a dying breed as Fenway Park is the only other facility that still stands to rival it.

If Wrigley is to continue on, the Cubs must take note of the successes of the Red Sox and their improvements to Fenway.

The Red Sox have capitalized on the uniqueness of their ballpark and generated new ways of generating revenue. Whether it be creating new seating on the Green Monster, or creating sponsor-branded sections such as Coca-Cola Corner. The future remains bright for the historic gem.

Sam Zell may deservedly be the bad guy as he tries to maximize the value of his newly owned assets, but the fact the Wrigley situation has gotten to this point needs to be questioned.

Cubs fans should hope that the proposed deals fall apart and Zell has to sell the stadium along with the Cubs. This would allow for the Wrigley name to stay and the Cubs organization to continue owning the famed park instead of renting out the ever-aging facility without the benefits of ownership.

Wrigley would still need work to be done, but the current proposal is not the way to go. Sam Zell is the only one who stands to benefit from it. While he has the power to make it so, the Cubs and their fans deserve much better.