General Cubs Chit-Chat

[ConstableRabbit]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

I mean... it likely is. The Loria-era Marlins -- one of the stingiest organizations in pro sports -- had their financials leaked several years ago and they were actually cash flow negative for many seasons. Of note, ticket revenues were ~$22m on 1.5m attendance and baseball team payroll was ~$45m (lol). Even if you were to triple attendance, it doesn't get to an enormous team payroll on its own. Franchise ownership is a vanity play. If it was so easy to be profitable, we'd see far more profit-above-all institutions (hedge funds, PE firms) buying in vs. prideful billionaires.

 

Even if you don't believe that it's hard to make money owning a team, it makes sense that ownership is building up around the park to bring in additional revenues. However, those investments take a large amount of upfront cost, and in the case of the hotel, likely licensing fees to Starwood/Marriott to run the property. It wouldn't be surprising if they've yet to yield any substantial profit. The Marlins docs also mention debts -- it wouldn't be shocking if, in addition to debt payments, the creditors imposed spending caps as contingencies (i.e., "you must use this loan for X only").

 

In short, there should probably be a distinction between:

1. "ownership isn't investing all of the organization's profits back into payroll"

2. "ownership isn't investing all of the organization's profits back into the organization"

3. "ownership isn't putting more money from outside the organization into payroll"

 

2 and 3 can both be correct.

[jersey cubs fan]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

I mean... it likely is. The Loria-era Marlins -- one of the stingiest organizations in pro sports -- had their financials leaked several years ago and they were actually cash flow negative for many seasons. Of note, ticket revenues were ~$22m on 1.5m attendance and baseball team payroll was ~$45m (lol). Even if you were to triple attendance, it doesn't get to an enormous team payroll on its own.

 

You're talking about the Marlins, that can't get people in the door for $5 and don't get 10,000 people to watch on TV. This isn't the Cubs.

 

As for your other point, Guggenheim did buy the Dodgers and paid a lot.

[Brian]

They’re basically the Bluth’s

 

There is a lot more parallels but holy crap is Todd like 100% Gob.

[Sammy Sofa]

Right, it's a given that sports ownership is more of an ego thing than anything else, but it's still nonsense for them to try and pull a gigantic pity party like they're being stymied from raking in tons of cash. These scumbags knew what they were getting into, and they're trying to bilk the system for as much profit as possible as the priority. It damn well wasn't a surprise to them what owning a pro baseball team means.

[ConstableRabbit]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

I mean... it likely is. The Loria-era Marlins -- one of the stingiest organizations in pro sports -- had their financials leaked several years ago and they were actually cash flow negative for many seasons. Of note, ticket revenues were ~$22m on 1.5m attendance and baseball team payroll was ~$45m (lol). Even if you were to triple attendance, it doesn't get to an enormous team payroll on its own.

 

You're talking about the Marlins, that can't get people in the door for $5 and don't get 10,000 people to watch on TV. This isn't the Cubs.

 

As for your other point, Guggenheim did buy the Dodgers and paid a lot.

Sure, but we don't have the data for the Cubs so need to make assumptions.

 

Counterpoint is that the Cubs also have far higher team payroll, non-team payroll, stadium/renovation/capex, and tax expenses than the Marlins did in 2009 or whenever it was.

 

And yes, Guggenheim did buy the team -- and they then got an enormous $8bn+ TV contract that likely makes them profitable.

[Forgotmyoldlogin]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

and they can't even make money off that hotel

I do wonder what kind of business they do in the off-season. There’s really nothing going on in Wrigleyville in February.

 

But I’m sure they thought about all this before they built the damn thing.

[Forgotmyoldlogin]

They’re basically the Bluth’s

 

There is a lot more parallels but holy crap is Todd like 100% Gob.

Oh absolutely. Undercover Boss showed us he can’t even sell hot dogs or park cars.

[David]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

and they can't even make money off that hotel

I do wonder what kind of business they do in the off-season. There’s really nothing going on in Wrigleyville in February.

 

But I’m sure they thought about all this before they built the damn thing.

 

out of curiosity, decided to check rates for tonight... a random thursday in february. $180 on the wholesale sites. into the $200s for the weekend.

[jersey cubs fan]

The Loews Chicago is $180 this weekend.

[squally1313]

There’s a lot I disagree with in that, mainly that it’s hard to make money owning a baseball team (go check the purchase price and what the Cubs are valued at now), but to your point about hedge/PE firms getting involved, there are strict rules about the number of owners for an organization. The Mark Walter/Guggenheim deal has to be structured very carefully to clear those rules and give a human being the control over decision making, not hundreds or thousands of investors.

[SouthSideRyan]

It's almost funny how much they can shamelessly lie about this horsefeathers. They're basically saying it's so hard to make money at baseball (and it's so mean the city won't let them bilk it) that they have no choice but to do things like build hotels and restaurants (and raise ticket prices).

and they can't even make money off that hotel

I do wonder what kind of business they do in the off-season. There’s really nothing going on in Wrigleyville in February.

 

But I’m sure they thought about all this before they built the damn thing.

 

Yes they thought about how it would be nice to own developed land around Wrigley purchased with the profits from the team. (See McCourt and his dodgers parking lots)

[imb]

the freaking marlins and jeffrey loria are not some analogue to the modern-day cubs, come on

 

for one the marlins entire operation is essentially a AA team compared to the operation the cubs have with the wrigleyville area and their monetization of it. Not to mention you're comparing baseball-mad chicago with freaking miami

 

and it's 100 percent naive to take any financial information about loria at face value. His entire operation was to strip that thing down as cheap as possible so he could sell and make a massive profit. running at some minor loss for a few years was a feature not a bug.

[ConstableRabbit]

the freaking marlins and jeffrey loria are not some analogue to the modern-day cubs, come on

 

for one the marlins entire operation is essentially a AA team compared to the operation the cubs have with the wrigleyville area and their monetization of it. Not to mention you're comparing baseball-mad chicago with freaking miami

 

and it's 100 percent naive to take any financial information about loria at face value. His entire operation was to strip that thing down as cheap as possible so he could sell and make a massive profit. running at some minor loss for a few years was a feature not a bug.

It's not directly comparable, but you have to think in line items and ratios and decide how their revenues and expenses would relate to ours. I mean, of course the Cubs bring in more revenue than the 2009 Marlins, ffs. We have discussed the Forbes estimate of ~$450m in 2018 revenue which is about 3.3x the $135m the 2009 Marlins brought in.

 

With that said, the Cubs expenses are a hell of a lot larger, too. For example: Florida's baseball payroll was 5x smaller. Their FO staff was probably far smaller and worse paid than the 2018 Cubs FO. To your point, they were running a dirt cheap operation: they probably didn't invest much in their ballpark, marketing/promotions, or non-FO operations staff. And we know that over the past 5 years, The Cubs have an (almost) renovated stadium, a new spring training facility, a new dominican facility, etc. It's unclear whether these projects were financed over time to lessen the cost impact in a single year, but that would be the fiscally prudent thing to do.

 

I am hopeful that the development in the neighborhood brings a ton of revenue that the ownership puts back into the team. I also don't know the mechanics of how it was financed or the breakeven analysis that was done for any of those projects. I don't think it's unreasonable to assume that the hotel is not printing much more money than its burned to date given the upfront costs.

[squally1313]

Holy horsefeathers dude. Stop sympathizing with the dudes complaining about how much safe desposit boxes cost to store the 1,000 Amazon stock they bought fifteen years ago.

[imb]

the freaking marlins and jeffrey loria are not some analogue to the modern-day cubs, come on

 

for one the marlins entire operation is essentially a AA team compared to the operation the cubs have with the wrigleyville area and their monetization of it. Not to mention you're comparing baseball-mad chicago with freaking miami

 

and it's 100 percent naive to take any financial information about loria at face value. His entire operation was to strip that thing down as cheap as possible so he could sell and make a massive profit. running at some minor loss for a few years was a feature not a bug.

It's not directly comparable, but you have to think in line items and ratios and decide how their revenues and expenses would relate to ours. I mean, of course the Cubs bring in more revenue than the 2009 Marlins, ffs. We have discussed the Forbes estimate of ~$450m in 2018 revenue which is about 3.3x the $135m the 2009 Marlins brought in.

 

With that said, the Cubs expenses are a hell of a lot larger, too. For example: Florida's baseball payroll was 5x smaller. Their FO staff was probably far smaller and worse paid than the 2018 Cubs FO. To your point, they were running a dirt cheap operation: they probably didn't invest much in their ballpark, marketing/promotions, or non-FO operations staff. And we know that over the past 5 years, The Cubs have an (almost) renovated stadium, a new spring training facility, a new dominican facility, etc. It's unclear whether these projects were financed over time to lessen the cost impact in a single year, but that would be the fiscally prudent thing to do.

 

I am hopeful that the development in the neighborhood brings a ton of revenue that the ownership puts back into the team. I also don't know the mechanics of how it was financed or the breakeven analysis that was done for any of those projects. I don't think it's unreasonable to assume that the hotel is not printing much more money than its burned to date given the upfront costs.

 

the cubs, as an entity, are worth 3-4x now what they were a decade ago. this comparison is completely faulty and meaningless.

[Sammy Sofa]

the freaking marlins and jeffrey loria are not some analogue to the modern-day cubs, come on

 

for one the marlins entire operation is essentially a AA team compared to the operation the cubs have with the wrigleyville area and their monetization of it. Not to mention you're comparing baseball-mad chicago with freaking miami

 

and it's 100 percent naive to take any financial information about loria at face value. His entire operation was to strip that thing down as cheap as possible so he could sell and make a massive profit. running at some minor loss for a few years was a feature not a bug.

It's not directly comparable, but you have to think in line items and ratios and decide how their revenues and expenses would relate to ours. I mean, of course the Cubs bring in more revenue than the 2009 Marlins, ffs. We have discussed the Forbes estimate of ~$450m in 2018 revenue which is about 3.3x the $135m the 2009 Marlins brought in.

 

With that said, the Cubs expenses are a hell of a lot larger, too. For example: Florida's baseball payroll was 5x smaller. Their FO staff was probably far smaller and worse paid than the 2018 Cubs FO. To your point, they were running a dirt cheap operation: they probably didn't invest much in their ballpark, marketing/promotions, or non-FO operations staff. And we know that over the past 5 years, The Cubs have an (almost) renovated stadium, a new spring training facility, a new dominican facility, etc. It's unclear whether these projects were financed over time to lessen the cost impact in a single year, but that would be the fiscally prudent thing to do.

 

I am hopeful that the development in the neighborhood brings a ton of revenue that the ownership puts back into the team. I also don't know the mechanics of how it was financed or the breakeven analysis that was done for any of those projects. I don't think it's unreasonable to assume that the hotel is not printing much more money than its burned to date given the upfront costs.

 

It's also not unreasonable to not give a flying horsefeathers how a family of billionaires and millionaires can't turn a profit at the moment on their dumb ballpark hotel.

[imb]

look guys, it's reasonable to believe that the ownership group who saw the value of their investment almost quadruple is actually broke because notorious liar cheapskate jeffrey loria ran his team, the historically poorly operated marlins, at a loss for a couple years in the worst baseball market in the league so he could sell the team at a massive profit.

[ConstableRabbit]

the freaking marlins and jeffrey loria are not some analogue to the modern-day cubs, come on

 

for one the marlins entire operation is essentially a AA team compared to the operation the cubs have with the wrigleyville area and their monetization of it. Not to mention you're comparing baseball-mad chicago with freaking miami

 

and it's 100 percent naive to take any financial information about loria at face value. His entire operation was to strip that thing down as cheap as possible so he could sell and make a massive profit. running at some minor loss for a few years was a feature not a bug.

It's not directly comparable, but you have to think in line items and ratios and decide how their revenues and expenses would relate to ours. I mean, of course the Cubs bring in more revenue than the 2009 Marlins, ffs. We have discussed the Forbes estimate of ~$450m in 2018 revenue which is about 3.3x the $135m the 2009 Marlins brought in.

 

With that said, the Cubs expenses are a hell of a lot larger, too. For example: Florida's baseball payroll was 5x smaller. Their FO staff was probably far smaller and worse paid than the 2018 Cubs FO. To your point, they were running a dirt cheap operation: they probably didn't invest much in their ballpark, marketing/promotions, or non-FO operations staff. And we know that over the past 5 years, The Cubs have an (almost) renovated stadium, a new spring training facility, a new dominican facility, etc. It's unclear whether these projects were financed over time to lessen the cost impact in a single year, but that would be the fiscally prudent thing to do.

 

I am hopeful that the development in the neighborhood brings a ton of revenue that the ownership puts back into the team. I also don't know the mechanics of how it was financed or the breakeven analysis that was done for any of those projects. I don't think it's unreasonable to assume that the hotel is not printing much more money than its burned to date given the upfront costs.

 

It's also not unreasonable to not give a flying horsefeathers how a family of billionaires and millionaires can't turn a profit at the moment on their dumb ballpark hotel.

This is the distinction I was mentioning earlier. Even if the Cubs were losing money as an entity, you'd want the owners to spend more because they have a lot. I get that! But that's not the discussion we were having and not what Ricketts was talking about.

[squally1313]

I remember working for one of those big firms, and we’d have meetings at the beginning of the year where they’d be like ‘alright guys, we’re shooting for 20% growth this year. 20% more revenue. It’s a big ask, but we believe in this company.’

 

And then at the end of the year, right before they say us down for comp discussions, they’d bring us all in and be like ‘Well as you can see here, we didn’t meet our targets, so we’ll have to take this into account when determining compensation.’ And it was like, you horsefeathers just made 15%.

 

This is how they are justifying it. Tom and his family of assholes thought they’d have swimming pools of hundred dollar bills to swan dive into, and instead it’s just $50s, so we’re the idiots.

[ConstableRabbit]

look guys, it's reasonable to believe that the ownership group who saw the value of their investment almost quadruple is actually broke because notorious liar cheapskate jeffrey loria ran his team, the historically poorly operated marlins, at a loss for a couple years in the worst baseball market in the league so he could sell the team at a massive profit.

Who is saying that? Each P&L has line items to calculate annual finances. We don't know the details of the Cubs finances but we have a team's actual P&L! And we know generally how much shittier/less popular/less spendy they were than the Cubs are now! When we're talking about cashflow and profitability, costs have to be discussed -- seems like the focus here is mostly on revenues.

[Tim]

look guys, it's reasonable to believe that the ownership group who saw the value of their investment almost quadruple is actually broke because notorious liar cheapskate jeffrey loria ran his team, the historically poorly operated marlins, at a loss for a couple years in the worst baseball market in the league so he could sell the team at a massive profit.

Who is saying that? Each P&L has line items to calculate annual finances. We don't know the details of the Cubs finances but we have a team's actual P&L! And we know generally how much horsefeathers/less popular/less spendy they were than the Cubs are now! When we're talking about cashflow and profitability, costs have to be discussed -- seems like the focus here is mostly on revenues.

We went through fairly detailed cost discussions earlier in the offseason, too.

[squally1313]

look guys, it's reasonable to believe that the ownership group who saw the value of their investment almost quadruple is actually broke because notorious liar cheapskate jeffrey loria ran his team, the historically poorly operated marlins, at a loss for a couple years in the worst baseball market in the league so he could sell the team at a massive profit.

Who is saying that? Each P&L has line items to calculate annual finances. We don't know the details of the Cubs finances but we have a team's actual P&L! And we know generally how much horsefeathers/less popular/less spendy they were than the Cubs are now! When we're talking about cashflow and profitability, costs have to be discussed -- seems like the focus here is mostly on revenues.

Now do the line for ‘Unrealized Gain on Investment’

[imb]

guys maybe amazon can't pay their employees $20 an hour, we know this because my local grocery store can't

[ConstableRabbit]

look guys, it's reasonable to believe that the ownership group who saw the value of their investment almost quadruple is actually broke because notorious liar cheapskate jeffrey loria ran his team, the historically poorly operated marlins, at a loss for a couple years in the worst baseball market in the league so he could sell the team at a massive profit.

Who is saying that? Each P&L has line items to calculate annual finances. We don't know the details of the Cubs finances but we have a team's actual P&L! And we know generally how much horsefeathers/less popular/less spendy they were than the Cubs are now! When we're talking about cashflow and profitability, costs have to be discussed -- seems like the focus here is mostly on revenues.

Now do the line for ‘Unrealized Gain on Investment’

If you buy a dilapidated Victorian mansion at a relative discount, then take out loans to massively fix it up over a few years, you don’t just get the new market rate of the house in your bank account unless you sell it.

[ConstableRabbit]

guys maybe amazon can't pay their employees $20 an hour, we know this because my local grocery store can't

If you had the P&L of a regional grocery store chain you could make some assertions about Whole Foods, by making assumptions about WF's superior pricing control, supply chain management, etc., yes.