By Ben Klayman
Oct 14 (Reuters) - Major League Baseball's Chicago Cubs have
thrilled fans with a run to the National League championship,
but the team formerly known more for tough losses and bad luck
is now set for a long and lucrative stretch both on and off the
baseball field.
Their run going forward will be fueled by young, less costly
players, a $650 million renovation of Wrigley Field that will
turn the storied ballpark into even more of a cash cow, and the
expected future establishment of a dedicated television network
worth billions of dollars, analysts and bankers said.
"The Cubs are going to be a team to reckon with on the field
and as a business enterprise for the next decade or so," said
Marc Ganis, president of consulting firm Sportscorp Ltd, which
advised Tribune Co in its sale of the Cubs to the Ricketts
family in 2009.
While the Cubs have not won a World Series since 1908 and
fans over the years have bemoaned black cat and billy goat
curses, the mood is more jubilant now following Monday's
series-clinching victory over their archrival St. Louis
Cardinals.
Many fans believe the worm has finally turned, but seeds for
the changes under way were planted when the Ricketts family
purchased control of the team and picked up speed after Theo
Epstein moved from the Boston Red Sox to become the club's
general manager two years later.
Everything starts with the play on the field, where this
year the Cubs have this year shed their lovable losers' image
and fans are instead dreaming of winning the World Series.
The losing before this year led Epstein to rebuild the team
with an emphasis on lower-priced, young players and that in turn
has given the team flexibility to spend on expensive free agents
such as the signing of pitcher Jon Lester this past offseason.
"They took their lumps for a while, but now it's bearing
fruit," said Sal Galatioto, president of sports banker Galatioto
Sports Partners, which represented the Ricketts family in their
purchase of the Cubs. "Great performance gives you leverage in
doing anything."
TRENDING POSITIVE
The financial trends all look good for the Cubs.
In 2009, the Cubs' payroll was more than $141 million, or
third highest among MLB's 30 pro teams, according to Baseball
Prospectus.
That fell last year to 20th at $93.2 million as the team
brought in young stars like third baseman Kris Bryant and
outfielder Kyle Schwarber, but missed the playoffs. The Cubs'
payroll climbed back to $120.3 million, or 13th in the league,
this year.
The Ricketts family bought 95 percent of the Cubs for $845
million and in March, Forbes magazine valued the entire club at
$1.8 billion, the fifth highest in the league and up 50 percent
from the prior year. The New York Yankees are No. 1 with an
estimated value of $3.2 billion.
That increase in the team's value is partly driven by the
funds pulled in at Wrigley, where the Cubs have the third
highest ticket prices in the league and generate even more from
concessions, according to research firm Team Marketing Report,
which tracks the industry. Cubs tickets average almost $45
apiece, compared with a league average of nearly $29.
Attendance at Wrigley Field, which can seat over 41,000
people, hit almost 3 million this season, good for sixth in the
league. That is an increase of almost 12 percent from 2014, when
the Cubs ranked 11th in attendance. The Cubs drew 3.3 million
fans in 2008.
Based on merchandise sales at MLB.com/shop, Cubs merchandise
finished sixth overall in the league as sales rose 80 percent,
baseball officials said. That was up from ninth place last year.
TO THE VICTOR...
With the team's success, however, both attendance and ticket
prices may continue to rise.
Famous for its ivy-covered outfield walls and urban location
where home run balls sometimes drop onto a residential street,
Wrigley Field is a top tourist attraction and has been declared
a city landmark. The ballpark is over 100 years old.
The Cubs last fall started the renovation of Wrigley, which
will be completed in phases. It has included a controversial
left field videoboard and a right field sign that were protested
unsuccessfully in federal court by owners of rooftop bars across
the street from the ballpark, who complained their views into
the stadium would be blocked.
The project has also entails the addition of new bleachers,
a new clubhouse, a restaurant and an outdoor plaza. It is
expected to be completed by opening day in 2019.
"They've taken all the steps to turn the Wrigley area into a
Cubs experience and they didn't do that just to make the fans
happy," said Michael Cramer, director of the sports media
program at the University of Texas and the former president of a
group that previously owned the Texas Rangers baseball club.
The Ricketts family has said the renovations were needed to
keep the team competitive.
The real big payoff is still to come, as the Ricketts plan
to establish a Cubs regional sports TV network following the
2019 season.
Given the development of digital technologies, a Cubs
network likely be worth more than the $3 billion at which the
New York Yankees' YES Network was valued, analysts and bankers
said.
"We look at ourselves as a baseball team first, but lots of
businesses after that, and on the media side we're really
excited about the future," Crane Kenney, the Cubs president of
business operations, said in an interview.
"We're in the third inning of our plan," he added. "We're
very, very early in our growth cycle."