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March 20, 2012

Ricketts: Everybody else gets subsidies, why shouldn't Cubs?

Chicago Cubs owner Tom Ricketts gave a talk to the all-powerful Naperville Area Chamber of Commerce yesterday, in the course of which he said this about the need for public subsidies for the renovation of Wrigley Field:

"There's 30 teams in baseball, and there's really two ways that you finance your stadium. One model, which about 25 teams use, is that you have a public agency build and provide you a stadium and you pay rent and expenses and some sort of amusement tax. The five other teams use a different model where they cover all of their expenses, but they don't pay any taxes. Believe it or not, Chicago has a hybrid model where you cover all of your own expenses, remain totally private and pay the second-highest taxes in the league."

This is ... I hate to say "lying," so let's just say an interesting interpretation of reality. The Boston Red Sox and San Francisco Giants, to name two, both pay the lion's share of their stadium costs and pay property and other taxes to boot. (And on the flip side, there are plenty of teams that got public funds and yet don't pay either rent or ticket taxes.)

What Ricketts is harping on is that Chicago has an amusement tax that applies to tickets for pretty much anything and everything, and he wants to get a bye from paying it, so that he can turn around and use the money on Wrigley Field improvements. As we've discussed before, since everybody else in town has to pay the tax, that'd be just as much of a subsidy as asking for bags of unmarked twenties.

Besides which, Ricketts and his family bought the Cubs (and Wrigley) without any ticket tax break in place; while it's tough to think of $900 million as a discount price for anything, it's clear that they would have had to pay more if they were getting one of the most popular franchises (and ballparks) in baseball, in the nation's third-largest media market, and a tax exemption to boot.

Ricketts added that "dialogue with a lot of elected officials" on this issue is "all moving in the right direction," but of course he would say that; all that really matters is what Chicago Mayor Rahm Emanuel thinks, and so far he's not talking. Maybe by "right direction" Ricketts just means "nobody's brandishing a steak knife."


Your post here on Rickett's was read and talked about this afternoon on WSCR All sports radio 670 in Chicago on the "Boers & Bernstein," show.
Terry Boers & Dan Bernstein are advocates for NOT subsidizing the cost of Wrigley renovations...

Posted by Dan M on March 20, 2012 07:13 PM

Well, as a businessman, if Ricketts really feels he's bought an encumbered business, he could always put the club back on the market.

He would be far from the first purchaser of a business to do that.

Posted by John Bladen on March 21, 2012 02:20 PM

Question about market size. Chicago is not exclusively the Cubs' market. The White Sox are a smaller yet sizable competitor. Given that, is it still completely accurate to say the Cubs' market is the third-largest?

Posted by Rich on March 25, 2012 03:34 AM

They're a team in the third-largest media market. They are not the third largest-market team. Does that help?

Posted by Neil deMause on March 25, 2012 11:07 AM

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